Location intelligence in advertising: effects of advertising localism on competitor spillovers
Syagnik Banerjee, Halil Bisgin, Murali Mani, Neslihan Bisgin, Debra ZahayPurpose
The Federal Trade Commission (FTC)'s Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights (FTC, 2022) has voiced increasing concern about growing concentration of advertising as threatening the US economy's shared prosperity and liberty. This article introduces a new geographic attribute: advertising localism, i.e. the proportion of advertising conducted within a county where the ads are targeted or displayed (irrespective of the brand's origin). The study then reports the effects of localism by platform (Search, Social, television) on customer's co-visits between national and local brands.
Design/methodology/approach
The article uses large anonymized location data sets of advertising expenditures and physical movements between stores derived from global positioning system (GPS) signals, weighted market-basket analysis and ordinary least squares (OLS) to develop competitor spillover metrics, and examine effects of advertising localism on such spillovers.
Findings
The article studies the effects of advertising localism on competitive spillovers (i.e. when customers of one brand co-visit a competitor brand) between national and local limited-service restaurant brands. Using geolocation data on advertising expenditures and physical customer movements between stores, the study finds that across 180 counties, advertising localism via user-intent-driven delivery, i.e. search engines, benefits national chains, driving more market-aggregation, whereas advertising localism via platform-driven delivery, i.e. social media, benefits local chains, driving more market-dispersion.
Originality/value
This article addresses needs and ways to utilize location data in advertising to assess changing market concentrations for oversight by brands as well as policy bodies.