Incentive Centered Design

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 In the News: The Huffington Post ran a story on a study by STIET Co-PI, Professor Michael Wellman and STIET Fellow Elaine Wah that shows high-frequency stock trading is bad for profits, including those of high-frequency traders. Wellman also published an op-ed in TechCrunch about the work.

 40 Under 40! Former STIET fellow, Aniket Gune, has been named a Today Brand Innovators "40 Under 40" winner as one of the most innovative marketers under 40. Aniket is the Director of Social Media Acquisition at American Express, building end-to-end word-of-mouth social programs that drive card acquisition.

 Congrats! Former STIET fellow, Christopher Kiekintveld, has been awarded a CAREER grant for research on strategic decision making using computer gaming models.

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Nov. 1 Seminar: David Reiley

Thu, 11/01/2012 - 4:00pm - 5:30pm
Seminar Information: 

David Reiley

Research Scientist, Google

"Does Retail Advertising Work? Measuring the Effects of Advertising on Sales via a Controlled Experiment on Yahoo!"

4:00-5:30 pm
UM: 3100 North Quad, 105 S. State St.
WSU: 313 State Hall (via videoconference)

Seminar Description: 

We measure the causal effects of online advertising on sales, using a randomized experiment performed in cooperation between Yahoo! and a major retailer. After identifying over one million customers matched in the databases of the retailer and Yahoo!, we randomly assign them to treatment and control groups. We analyze individual-level data on ad exposure and weekly purchases at this retailer, both online and in stores. We find statistically and economically significant impacts of the advertising on sales. The treatment effect persists for weeks after the end of an advertising campaign, and the total effect on revenues is estimated to be more than seven times the retailer's expenditure on advertising during the study. Additional results explore differences in the number of advertising impressions delivered to each individual, online and offline sales, and the effects of advertising on those who click the ads versus those who merely view them. Power calculations show that, due to the high variance of sales, our large number of observations brings us just to the frontier of being able to measure economically significant effects of advertising. We also demonstrate that without an experiment, using industry-standard methods based on endogenous cross- sectional variation in advertising exposure, we would have obtained a wildly inaccurate estimate of advertising effectiveness.

Seminar Speaker Bio: 

David Reiley is a Research Scientist at Google, where he has begun to research the causal effects of mobile advertising. A leader in the field-experiments revolution in economics and the social sciences, he has published experiments on diverse topics, from auction bidding to charitable fundraising, in leading economics journals. His most recent article was "The Economics of Spam" (with Justin Rao) in the Journal of Economic Perspectives. From 2007-2012, Reiley was a Research Scientist at Yahoo!, where his research on measuring the effectiveness of online advertising earned him the Super Star Award, the highest honor bestowed on a Yahoo! employee. He was previously Arizona Public Service Professor of Economics at the University of Arizona, and has also taught at Vanderbilt University and at the Kellogg School of Management at Northwestern University. Reiley is the Co-Editor for Field Experiments at Economic Inquiry, and a coauthor (with Avinash Dixit and Susan Skeath) of the best-selling game theory textbook Games of Strategy, Third Edition. He holds a bachelor’s degree in Astrophysical Sciences from Princeton University, and a PhD in economics from MIT.


Does Retail Advertising Work.pdf2.33 MB