Measuring Advertising Effects: A Method to Bridge Psychological Measures with Demand Metrics

Practitioners and researchers alike recognize both the importance and the challenge of measuring advertising effects. Unfortunately, when practitioners turn to academic research for guidance to link advertising’s psychological effects to subsequent demand outcomes, answers are elusive. One reason is a persistent disconnect between research examining advertising’s impact on psychological measures (e.g., attitudes and beliefs)—typically the focus of behavioral researchers—and its impact on demand metrics (e.g., advertising and price elasticities)—typically the focus of quantitative researchers. This paper introduces a methodological bridge to connect psychological measures to demand metrics by synthesizing three literatures: behavioral advertising research, willingness-to-pay (WTP), and econometric demand modeling. As a preview, by properly assessing WTP, academics and practitioners alike can bridge psychological responses and marketplace outcomes. Our experiments provide empirical evidence for the feasibility of this approach across three distinct use cases: 1) a brand’s own advertising, 2) competitor advertising, and 3) targeted advertising. Our results also offer novel empirical insights into how comparative choice processes shape advertising effectiveness.