The Economic and Cognitive Costs of Annoying Display Advertisements

Some online display advertisements are annoying. Although publishers know the payment they receive to run annoying ads, little is known about the cost that such ads incur (e.g., causing website abandonment). Across three empirical studies, the authors address two primary questions: (1) What is the economic cost of annoying ads to publishers? and (2) What is the cognitive impact of annoying ads to users? First, the authors conduct a preliminary study to identify sets of more and less annoying ads. Second, in a field experiment, they calculate the compensating differential, that is, the amount of money a publisher would need to pay users to generate the same number of impressions in the presence of annoying ads as it would generate in their absence. Third, the authors conduct a mouse-tracking study to investigate how annoying ads affect reading processes. They conclude that in plausible scenarios, the practice of running annoying ads can cost more money than it earns.