Executive Summary
The authors analyze a multimillion dollar, three-year field study sponsored by five firms to assess whether the digital video recorders (DVRs) affect consumers’ shopping behavior for advertised and private label goods. In this study, a large sample of households received an offer for a free DVR and service, and approximately 20% accepted. The authors observe each household’s shopping history for 48 consumer packaged goods categories during the 13 months before and the 26 months after the DVR offer.
Contrasting the behavior of households that accepted the TiVo offer with those that did not, the authors find no evidence that DVRs reduce household spending for advertised branded or private label goods, either one or two years after the DVRs are shipped. The estimated DVR effects vary little from zero, suggesting the data have sufficient power to identify a true null effect. These results are robust to several controls for self-selection into the DVR treatment group.
Using advertising exposure information for seven of the brands in the study, the authors offer suggestive evidence that ad skipping occurs for a relatively small fraction of the total television content viewed, and they conjecture this to be a candidate for the lack of a DVR effect. They also discuss some other potential explanations for the lack of a DVR effect, including the increased potential for television viewing by DVR households that time shift shows and the possibility that advertising exposures still occur during fast-forwards.
Biography
Bart J. Bronnenberg is Professor of Marketing and CentER Research Fellow in the Tilburg School of Economics and Management at Tilburg University. Bart holds a BSc in Business Engineering from Twente University and an MSc and a PhD in Management from INSEAD. His current research interests include new products and innovation, the market structure of branded goods, the geography of consumer goods markets, and consumer search. He is a member of the editorial board of Journal of Marketing Research and Journal of Marketing, and he is an associate editor at Quantitative Marketing and Economics, Management Science, Marketing Science, and International Journal of Research in Marketing. He has published in Journal of Marketing Research, Journal of Political Economy, Management Science, Marketing Science, Journal of Consumer Research, Marketing Letters, and Quantitative Marketing and Economics, among other journals. He has been the recipient of several research and teaching awards, such as the John D.C. Little Award and the Paul Green Award.
Jean-Pierre Dubé is Sigmund E. Edelstone Professor of Marketing and Robert King Steel Faculty Fellow at the University of Chicago Booth School of Business. He is also a Faculty Research Fellow for the National Bureau of Economic Research (NBER) in the Industrial Organization program. He serves on the advisory boards of Comscore Networks and Prepme.com. Jean-Pierre holds a BSc in Quantitative Economics from the University of Toronto and a PhD in Economics from Northwestern University. His recent research interests include the competitive dynamics associated with pricing and advertising, the impact of consumer switching costs on pricing, price discrimination, industrial market structure for branded goods, and Internet marketing. He serves as an area editor for Journal of Marketing Research, Management Science, Marketing Science, and Quantitative Marketing and Economics. He has published several articles in the Journal of Marketing Research, Journal of Political Economy, Management Science, Marketing Science, Marketing Letters, and Quantitative Marketing and Economics.
Carl F. Mela is T. Austin Finch Foundation Professor of Marketing at Duke University, where he teaches brand management and the marketing core. He holds an Engineering degree from Brown University and a PhD in Marketing from Columbia University. Professor Mela’s research focuses on the long-term effects of marketing activity, customer management, the Internet, and new media. His articles have appeared in Journal of Marketing Research, Marketing Science, Journal of Marketing, Harvard Business Review, and Journal of Consumer Research and have received or been finalists for more than 20 best-paper awards. Professor Mela serves as an associate editor at Marketing Science, Journal of Marketing Research, and Quantitative Marketing and Economics and serves on the editorial boards of Journal of Marketing and Marketing Letters. Professional boards include the Word of Mouth Marketing Association and Information Resources Inc. His home page is located at http://www.duke.edu/~mela.
Journal of Marketing Research, Volume 47, Number 6, December 2010
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