Online Display Advertising: Modeling the Effects of Multiple Creatives and Individual Impression Histories

Online advertising campaigns often consist of multiple ads, each with different creative content. We consider how various creatives in a campaign differentially affect behavior given the targeted individual's ad impression history, as characterized by the timing and mix of previously seen ad creatives. Specifically, we examine the impact that each ad impression has on visiting and conversion behavior at the advertised brand's website. We accommodate both observed and unobserved individual heterogeneity and take into account correlations among the rates of ad impressions, website visits, and conversions. We also allow for the accumulation and decay of advertising effects, as well as ad wearout and restoration effects. Our results highlight the importance of accommodating both the existence of multiple ad creatives in an ad campaign and the impact of an individual's ad impression history. Simulation results suggest that online advertisers can increase the number of website visits and conversions by varying the creative content shown to an individual according to that person's history of previous ad impressions. For our data, we show a 12.7% increase in the expected number of visits and a 13.8% increase in the expected number of conversions.