TY - JOUR
T1 - What's advertising content worth? Evidence from a consumer credit marketing field experiment
AU - Bertrand, Marianne
AU - Karlan, Dean
AU - Mullainathan, Sendhil
AU - Shafir, Eldar
AU - Zinman, Jonathan
N1 - Funding Information:
∗Previous title: “What’s Psychology Worth? A Field Experiment in the Consumer Credit Market.” Thanks to Rebecca Lowry, Karen Lyons, and Thomas Wang for providing superb research assistance. Also, thanks to many seminar participants and referees for comments. We are especially grateful to David Card, Ste-fano DellaVigna, Larry Katz, and Richard Thaler for their advice and comments. Thanks to the National Science Foundation, the Bill and Melinda Gates Foundation, and USAID/BASIS for funding. Much of this paper was completed while Zinman was at the Federal Reserve Bank of New York (FRBNY); he thanks the FRBNY for research support. Views expressed are those of the authors and do not necessarily represent those of the funders, the Federal Reserve System, or the Federal Reserve Bank of New York. Special thanks to the Lender for generously providing us with the data from its experiment.
PY - 2010/2
Y1 - 2010/2
N2 - Firms spend billions of dollars developing advertising content, yet there is little field evidence on how much or how it affects demand. We analyze a direct mail field experiment in South Africa implemented by a consumer lender that randomized advertising content, loan price, and loan offer deadlines simultaneously. We find that advertising content significantly affects demand. Although it was difficult to predict ex ante which specific advertising features would matter most in this context, the features that do matter have large effects. Showing fewer example loans, not suggesting a particular use for the loan, or including a photo of an attractive woman increases loan demand by about as much as a 25% reduction in the interest rate. The evidence also suggests that advertising content persuades by appealing "peripherally" to intuition rather than reason. Although the advertising content effects point to an important role for persuasion and related psychology, our deadline results do not support the psychological prediction that shorter deadlines may help overcome time-management problems; instead, demand strongly increases with longer deadlines.
AB - Firms spend billions of dollars developing advertising content, yet there is little field evidence on how much or how it affects demand. We analyze a direct mail field experiment in South Africa implemented by a consumer lender that randomized advertising content, loan price, and loan offer deadlines simultaneously. We find that advertising content significantly affects demand. Although it was difficult to predict ex ante which specific advertising features would matter most in this context, the features that do matter have large effects. Showing fewer example loans, not suggesting a particular use for the loan, or including a photo of an attractive woman increases loan demand by about as much as a 25% reduction in the interest rate. The evidence also suggests that advertising content persuades by appealing "peripherally" to intuition rather than reason. Although the advertising content effects point to an important role for persuasion and related psychology, our deadline results do not support the psychological prediction that shorter deadlines may help overcome time-management problems; instead, demand strongly increases with longer deadlines.
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U2 - 10.1162/qjec.2010.125.1.263
DO - 10.1162/qjec.2010.125.1.263
M3 - Article
AN - SCOPUS:76049105226
SN - 0033-5533
VL - 125
SP - 263
EP - 306
JO - Quarterly Journal of Economics
JF - Quarterly Journal of Economics
IS - 1
ER -