More Selling
Distributional Impacts of the Changing Retail Landscape
Yue Cao et al.
NBER Working Paper, December 2024
Abstract:
A common tactic to estimate willingness-to-travel exploits variation in the relative proximity of consumers to supplier locations. The validity of these estimates relies on the exogeneity of that consumer-supplier distance. We argue that distance to suppliers is endogenous because suppliers strategically choose locations to target consumers; we introduce a novel instrument to address this form of endogeneity. Using geolocation data from millions of smartphones, we estimate consumer preferences for specific retail chains across income groups and regions. We show that accounting for distance endogeneity significantly alters willingness-to-travel measures. Contrary to the prevailing "retail apocalypse" narrative, we find that consumer surplus per trip to general merchandise stores did not significantly decline from 2010 to 2019. For the lowest-income consumers, the expansion of national chains, particularly dollar stores, nearly compensates for the closure of traditional department stores and regional chains. Notably, failing to account for distance endogeneity leads to the erroneous conclusion that lower-income households experienced statistically significant consumer surplus declines.
Business-to-Investor Marketing: The Interplay of Costly and Costless Signals
Greg Nyilasy et al.
Journal of Marketing, forthcoming
Abstract:
Marketing to investors -- especially when seeking funding for startups -- is unique, with investors facing extreme uncertainty. This study uses foundational work in marketing, economics, management, finance, and psychology, as well as theories-in-use development with angel and venture capital investors, to build a business-to-investor marketing theory. The theory proposes that investors rely on marketing signals from startups, whether they are costly (financial, social, human, and intellectual resource endowments) or costless (verbal passion and concreteness). Results of a large quantitative field study of 5,334 written proposals from startups show that costly and costless signals have interactive effects on investor acceptance. The natural entrepreneurial tendency to compensate for a lack of costly signals with the use of passionate language backfires, reducing investor acceptance. Only when costly signals are communicated does a greater use of passion increase investor acceptance. Further, written proposals should be moderately concrete when they lack costly signals and should be formulated abstractly when plenty of costly signals can be offered. These contingencies provide insights into costly-costless signal interdependence in business-to-investor marketing and suggest how startups can optimize their written proposals for investor acceptance.
Ideas worth spreading? When, how, and for whom information load hurts online talks' popularity
Amir Sepehri, Rod Duclos & Nasir Haghighi
Journal of Personality and Social Psychology, forthcoming
Abstract:
What makes cultural products such as edutainment (i.e., online talks) successful versus not? Asked differently, which characteristics make certain addresses more (vs. less) appealing? Across 12 field and lab studies, we explore when, why, and for whom the information load carried in TED talks causes them to gain (vs. lose) popularity. First and foremost, we uncover a negative effect whereby increases in the number of topics broached in a talk (i.e., information load) hurt viewer adoption. The cause? Processing disfluency. As information load soars, content becomes more difficult to process, which in turn reduces interest. Probing process further, we show this effect fades among audience members with greater need for cognition, a personality trait marking a penchant for deep and broad information processing. Similarly, the effect fades among edutainment viewers favoring education goals (i.e., cognitive enrichment) whereas it amplifies among those favoring entertainment (i.e., hedonic pleasure). Our investigation also documents the counterintuitiveness of our findings (i.e., how individuals mispredict which talks they would actually [dis]like). From these results, we derive theoretical insights for processing fluency research and the psychology of cultural products adoption (i.e., we weigh in on when, why, and for whom fluency has favorable vs. unfavorable downstream effects). We also derive prescriptive insights for (a) players of the edutainment industry whose very business hinges on curating appealing content (e.g., TED, Talks@Google, The Moth, Big Think, Spotify) and (b) communicators of all creeds wishing to broaden their reach and appeal (e.g., professors, scientists, politicians, journalists, bloggers, podcasters, content editors, online community managers).
The Conditional-Promotion Paradox: When and Why Conditional Promotions Decrease Total Sales of the Promoted Product
Andong Cheng & Ashley Stadler Blank
Journal of Marketing Research, forthcoming
Abstract:
Conditional promotions are price promotions that require consumers to meet a precondition to qualify for a discount. While research shows that conditional promotions can increase sales of the promoted product compared to no promotion (i.e., sales at the regular price), this paper identifies the conditions under which conditional promotions can decrease sales of the promoted product compared to no promotion. Across five studies, we find that conditional promotions with a high precondition cost and high discount are the most likely to decrease total sales of the promoted product. We theorize that this decrease occurs because the high precondition cost deters consumers from purchasing the promoted product under the promotion, while the high discount and corresponding decrease in transaction utility deter consumers from purchasing the promoted product at the regular price. These findings contribute to the promotions literature by identifying when and why conditional promotions help or hurt total sales of the promoted product.
Engagement That Sells: Influencer Video Advertising on TikTok
Jeremy Yang, Juanjuan Zhang & Yuhan Zhang
Marketing Science, forthcoming
Abstract:
Many ads are engaging, but what makes them engaging may have little to do with the product. This problem can be particularly relevant to influencer advertising if influencers are motivated to promote themselves, not just the product. We develop an algorithm to measure the degree of effective engagement associated with the product and use it to predict the sales lift of influencer video advertising. We propose the concept of the product engagement score (PE score) to capture how engaging the product itself is as presented in a video. We estimate pixel-level engagement as a saliency map by training a deep three-dimensional convolutional neural network on video-level engagement data. We locate pixel-level product placement with an object detection algorithm. The PE score is computed as the pixel-level, engagement-weighted product placement in a video. We construct and validate the algorithm with influencer video ads on TikTok and product sales data on Taobao. We use variation in video posting time to identify video-specific sales lift and show that the PE score significantly and robustly predicts sales lift. We explore drivers of engagement and discuss how various stakeholders in influencer advertising can use the PE score in a scalable way to manage content, align incentives, and improve efficiency.