[Paper] The Cost of Annoying Ads

Title: The Cost of Annoying Ads

Authors: Daniel G. Goldstein, R. Preston McAfee, Siddarth Suri

Abstract: Display advertisements vary in the extent to which they annoy users. While publishers know the payment they receive to run annoying ads, little is known about the cost such ads incur due to user abandonment. We conducted a two-experiment investigation to analyze ad features that relate to annoyingness and to put a monetary value on the cost of annoying ads. The first experiment asked users to rate and comment on a large number of ads taken from the Web. This allowed us to establish sets of annoying and innocuous ads for use in the second experiment, in which users were given the opportunity to categorize emails for a per-message wage and quit at any time. Participants were randomly assigned to one of three different pay rates and also randomly assigned to categorize the emails in the presence of no ads, annoying ads, or innocuous ads. Since each email categorization constituted an impression, this design, inspired by Toomim et al., allowed us to determine how much more one must pay a person to generate the same number of impressions in the presence of annoying ads compared to no ads or innocuous ads. We conclude by proposing a theoretical model which relates ad quality to publisher market share, illustrating how our empirical findings could affect the economics of Internet advertising.

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