Presenters: Ayman Farahat, Adobe Research, US
James G. Shanahan, Church and Duncun, US
Over the past 18 years online advertising has grown to a $70 billion industry worldwide annually. Despite this impressive growth, online advertising faces many (and some would say traditional) challenges including how to measure the efficiency or the potential loss of sales caused by the inefficient use of marketing dollars. Consequently, it is vital to measure, maximize, and benchmark the efficiency of marketing media expenditures. ?Dr. Farahat and Dr. Shanahan have been at the forefront of online advertising since early 2008. They have jointly helped introduce audience to the Online advertising world at leading conference including WWW2008 and SIGIR 2008. This tutorial is the natural progression of previous tutorials given by the authors.
The tutorial introduces the field of econometrics as a means of measuring the effectiveness of digital marketing. Econometrics is a field that extends and applies statistical methods to the analysis of economic phenomena. In that vein, econometrics goes beyond traditional statistics and explicitly recognizes the complexities of human behavior. Consider for example the impact of deep discounts on survival of restaurants. Struggling businesses are more likely to offer these deep discounts and eventually fail. A naïve application of statistical techniques will overestimate the impact of deep discounts on business survival. In this case, the discounts are an endogenous variable as compared to an exogenous variable. This type of specification error highlights why we need a deeper look at the variables that go into statistical models. Econometrics addresses these and other issues in a formal and rigorous manner.
In this tutorial, we will give an overview of modern econometric techniques and show how they can be applied at scale. In particular, we highlight the difference between exogenous and endogenous variables and how the latter can lead to biased estimates of treatment effects. In addition, we will present best practices and case studies in testing the efficiency of the advertising across a variety of media types and channels: print, broadcast, and the Internet, social media etc., highlighting how econometrics can be used to accurately evaluate the causal impact of various marketing efforts. We also describe when the casual impact cannot be estimated. While, there have been a few studies that attempted to quantify the impact of these technologies, they have been plagued with selection bias and have often blurred the distinction between causation and correlation; these will also be covered in detail.
In addition, this tutorial will overview the ever evolving field of digital advertising detailing the key business models and technologies that drive field.