The Unfavorable Economics of Measuring the Returns to Advertising
Lewis first author. Across 25 large field experiments with major American retailers and brokerages, most reaching millions of customers, the median confidence interval on return on investment was more than 100 percentage points wide. Individual sales are so volatile, the authors calculate, that informative advertising experiments can easily require more than 10 million person-weeks, which makes them costly and potentially infeasible for many firms.
Lewis first author. Across 25 large field experiments with major American retailers and brokerages, most reaching millions of customers, the median confidence interval on return on investment was more than 100 percentage points wide. Individual sales are so volatile, the authors calculate, that informative advertising experiments can easily require more than 10 million person-weeks, which makes them costly and potentially infeasible for many firms.
Written from the abstract read 2026-10-18.
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Lewis, R. A., & Rao, J. M. (2015). The Unfavorable Economics of Measuring the Returns to Advertising. Quarterly Journal of Economics, 130(4), 1941-1973. doi:10.1093/qje/qjv023.