平特五不中

Sha Yang

Marshall School of Business
University of Southern California

鈥淒riving鈥� the Platform Growth: The Impact of Out-of-Home Advertising

Date: Friday, November 29, 2024
Time: 10:30 am-12:00 pm EST
Location: Bronfman building, room 046

All are cordially invited to attend.

Abstract:

Despite its significance and widespread use, out-of-home (OOH) advertising remains relatively underexplored in academic research. In this study, we leverage a novel empirical setting involving a leading freight on-demand platform in China that introduced a policy encouraging drivers to apply car wraps featuring the platform's logo. This policy allows us to examine the effects of OOH advertising and gain a nuanced understanding of the mechanisms driving these effects. Operating as a freight equivalent of Uber, the platform connects consumers with van and truck drivers for intra-city goods transportation. It implements a car wrap encouragement policy following a period without such regulation. We use cities where the car wrap policy was implemented between June 2020 and May 2021 as the treatment group, and those without the policy during the same period as the control group. Employing a Staggered Difference-in-Differences estimation, we assess the impact of increased OOH advertising on platform performance. Our findings reveal that OOH advertising via car wraps significantly increased transactions or completed orders. This effect manifested immediately and intensified rapidly, reaching peak growth momentum by the third month. However, we also observe that the policy created a short-term imbalance between demand and supply, with a more pronounced impact on number of order fulfillment requests than on number of consumer order requests. This excess supply, driven by increased OOH advertising, enhanced service quality but simultaneously led to a decline in driver satisfaction. Further analysis shows that this effect primarily stemmed from attracting new users by increasing both consumer and driver awareness of the platform, rather than encouraging additional usage among existing customers. These insights contribute valuable understanding into the effective use of OOH advertising strategies.