Essays on Advertisement Effectiveness in Internet Video Platforms

Abstract

Advertisements on internet video platforms, such as YouTube, have become very prominent in recent years. Due to their low cost per impression, industry has been using potentially suboptimal strategies for online advertising where they advertise regularly with a high frequency. This leads to high advertising expenditure for the firm. In this dissertation, I study two aspects of advertising strategy, namely, frequency and scheduling to gain a better understanding of their effectiveness. Frequency refers to the rate at which advertisements are shown and scheduling refers to the periodicity of the advertisements. I build upon extant literature in the context of conventional media such as TV and Print, to study how advertisement frequency and scheduling affects its advertising effectiveness in internet video platforms. Using two experiments, I show that using a low frequency strategy and a scheduling strategy with periodic breaks leads to the same outcome on five measures as a high frequency and continuous advertising strategy. Shifting strategies can potentially lower advertising costs for firms.