Improving the effectiveness of time-based display advertising

Display advertisements are typically sold by the impression, where one impression is simply one download of an ad. Previous work has shown that the longer an ad is in view, the more likely a user is to remember it and that there are diminishing returns to increased exposure time Goldstein et al. 2011. Since a pricing scheme that is at least partially based on time is more exact than one based solely on impressions, time- based advertising may become an industry standard. We answer an open question concerning time-based pricing schemes: how should time slots for advertisements be divided? We provide evidence that ads can be scheduled in a way that leads to greater total recollection, which advertisers value, and increased revenue, which publishers value. We document two main findings. First, we show that displaying two shorter ads results in more total recollection than displaying one longer ad of twice the duration. Second, we show that this effect disappears as the duration of these ads increases. We conclude with a theoretical prediction regarding the circumstances under which the display advertising industry would benefit if it moved to a partially or fully time-based standard.