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Using information on advertising and mortgages originated by subprime lenders, we study whether advertising helped consumers find cheaper mortgages. Lenders that advertise more within a region sell more expensive mortgages, measured as the excess rate of a mortgage after accounting for borrower, contract, and regional characteristics. These effects are stronger for mortgages sold to less sophisticated consumers. We exploit regional variation in mortgage advertising induced by the entry of Craigslist and other tests to demonstrate that these findings are not spurious. Analyzing advertising content reveals that initial/introductory rates are frequently advertised in a salient fashion, where reset rates are not.

Firms spend billions of dollars on advertising every year but remain uncertain about allocation across various advertising vehicles. Allocation decisions are even more complex as online advertising has proliferated and consumers' media usage patterns have become more fragmented. To determine advertising effectiveness, the authors group firms' advertising vehicle choices into three theoretically grounded and empirically verified smaller subsets: national, regional, and online advertising. Subsequently, they assess how the three advertising vehicles independently and jointly affect firm performance. Using 12 years of data covering 662 manufacturing firms, the authors find that while national, regional, and online advertising each have a positive and significant main effect on firm performance, each advertising vehicle weakens the effectiveness of the respective other two advertising vehicles (e.g., a 1% increase in online advertising increases firm performance by .32% but also decreases national [.15%] and regional [.03%] advertising effectiveness). A battery of robustness checks triangulates this result. Although all three media vehicles contribute to net increases in performance, the authors discuss the need to strategically integrate them to maximize combined effectiveness.

When local media report news about local companies, they use fewer negative words compared to the same media reporting about nonlocal companies. We document that one reason for this positive slant is the firms' local media advertising expenditures. Abnormal positive local media slant strongly relates to firm equity values. The effect is stronger for small firms; firms held predominantly by individual investors; and firms with illiquid or highly volatile stock, low analyst following, or high dispersion of analyst forecasts. These findings show that news content varies systematically with the characteristics and conflicts of interest of the source.

We examine the effect of race on market outcomes by selling iPods through local online classified advertisements throughout the US. Each advertisement features a photograph including a dark or light-skinned hand, or one with a wrist tattoo. Black sellers receive fewer and lower offers than white sellers, and the correspondence with black sellers indicates lower levels of trust. Black sellers' outcomes are particularly poor in thin markets (suggesting that discrimination may not 'survive' competition among buyers) and those with the most racial isolation and property crime (consistent with channels through which statistical discrimination might operate).

Consumers from cultures that read from left to right possess a spatial representation of time whereby the past is visualized on the left and the future is visualized on the right. Across four studies, the current research investigates whether and how this past-left, future-right conceptualization of time affects attitudes toward time-related products. Specifically, when consumers view advertisements in which product images are positioned congruently (incongruently) with their spatial representation of time, they have more (less) favorable attitudes toward the product. This effect occurs for both products that naturally involve the progression of time (e.g., self-improvement products) and also products for which a time component is a desired attribute (e.g., antiques). The effect of horizontal position reverses among consumers who read from right to left. The mediating role of processing fluency is highlighted as an underlying mechanism, and the moderating role of need for structure is identified.

The authors examine whether the growth of the Internet has reduced the effectiveness of government regulation of advertising. They combine nonexperimental variation in local regulation of offline alcohol advertising with data from field tests that randomized exposure to online advertising for 275 different online advertising campaigns to 61,580 people. The results show that people are 8% less likely to say that they will purchase an alcoholic beverage in states that have alcohol advertising bans compared with states that do not. For consumers exposed to online advertising, this gap narrows to 3%. There are similar effects for four changes in local offline alcohol advertising restrictions when advertising effectiveness is observed both before and after the change. The effect of online advertising is disproportionately high for new products and for products with low awareness in places that have bans. This suggests that online advertising could reduce the effectiveness of attempts to regulate offline advertising channels because online advertising substitutes for (rather than complements) offline advertising.

We describe two auction forms for search engine advertising and present two simple theoretical results concerning i) the estimation of click-through rates and ii) how to adjust the auctions for broad match search. We also describe some of the practical issues involved in implementing a VCG auction.

The ad auctions used by major search engines all have a similar structure. Advertisers enter ad text, keywords, and bids into the system. When a user sends a query to the search engine, the system finds a set of ads with keywords that match the query and determines which ads to show and where to show them. When the search results and ads are displayed, the user may click on an ad for further information. In this case, the advertiser pays the search engine an amount determined by the bids of the other competing advertisers. The expected revenue received by the search engine is the price per click the expected number of clicks. The search engine would like to sell the most prominent positions to those ads that have the highest expected revenue. To accomplish this, the ads are ranked by bid times expected clickthrough rates, and those ads with the highest revenue are shown in the most prominent positions. Search engines may also consider various measures of \"ad quality\" in their choice of which ads to display.

In this paper, we develop a formal model which identifies a separate supply-side impact of targeting. Specifically, targeting allows general outlets to more efficiently allocate scarce advertising space, resulting in an increase in the number of advertisers who can be accommodated. We have established that when advertising space is unconstrained, general outlets can expand advertising space to mitigate cost or all of the inefficiency that arises due to their heterogeneous audiences, so that targeting has little or no value. Although more realistic assumptions, such as limits on advertising space or advertiser capacity constraints create a greater role for targeting, the supply effect still operates within the bounds of these constraints. Our analysis supports the broad intuition that advances in targeting technology will lead to the growth of general outlets at the expense of tailored outlets, but our findings qualify the extent of the impact and suggest that general outlets will adopt and utilize targeting technology more slowly the technological efficiency improves.

Media freedom strongly inhibits corruption and promotes good governance, but what leads to media freedom? Do economic development and higher advertising revenues tend to make media outlets independent of political groups' influence? Using data on nineteenth-century American newspapers, I show that places with higher advertising revenues were likelier to have newspapers that were independent of political parties. Similar results hold when local advertising rates are instrumented by regulations on outdoor advertising and newspaper distribution. In addition, newly created newspapers were more likely to enter the market as independents in places with higher advertising rates. I also exploit the precise timing of major changes in advertising rates to identify how advertising revenues affected the entry of new newspapers. Finally, I demonstrate that economic development, and concomitant higher advertising revenue, is not the only reason that an independent press expands; political factors also played a role.