Policymakers are increasingly debating the relative social costs and benefits of digital advertising. While ads typically benefit platforms and advertisers, do they disadvantage consumers? In a new study, researchers have analyzed advertising on Facebook, comparing the effects on consumers of seeing ads versus not seeing ads. The study found no significant differences in users’ valuations between the two groups, suggesting that either the harmful effects of ads are relatively small or that certain benefits offset the harms.
Policymakers are increasingly debating the relative social costs and benefits of digital advertising. While ads typically benefit platforms and advertisers, do they disadvantage consumers? In a new study, researchers have analyzed advertising on Facebook, comparing the effects on consumers of seeing ads versus not seeing ads. The study found no significant differences in users’ valuations between the two groups, suggesting that either the harmful effects of ads are relatively small or that certain benefits offset the harms.
The study, by researchers at Carnegie Mellon University, Stanford University, Northwestern University, and Meta, appears as a new NBER working paper.
“In theory, the effect of online ads on consumer welfare could go either way”, explains Avinash Collis, assistant professor of management science and economics at Carnegie Mellon’s Heinz College, who led the study.
