The Value of Digital Advertising for SMBs

Last registered on April 12, 2022


Trial Information

General Information

The Value of Digital Advertising for SMBs
Initial registration date
April 08, 2022

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published
April 12, 2022, 8:16 AM EDT

First published corresponds to when the trial was first made public on the Registry after being reviewed.



Primary Investigator


Other Primary Investigator(s)

PI Affiliation

Additional Trial Information

In development
Start date
End date
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
Firms spent over $285 billion on advertising in the United States in 2021, of which about $160 billion was on digital ads. Advertising is believed to be instrumental in the growth and success of businesses by allowing firms to reach new markets as well as lowering search costs and frictions for consumers. The advent of digital advertising, a burgeoning recent phenomenon, has the potential to be even more valuable to firms and consumers alike. Digital ads can be highly targeted towards relevant consumers and reach difficult or niche markets at relatively low costs. In spite of the rapidly growing nature of digital ads as the predominant means of advertising, and widespread interest from both academia and industry, there is still relatively little evidence on the effectiveness of digital advertising on firm performance. Our RCT aims to provide empirical evidence on the value of digital advertising to firms, in particular SMBs, in terms of firm revenue and growth. Our experiment will allow us to study a large number of businesses and answer questions such as what are incremental impacts of digital advertising on firm success, and how these results vary across different firm characteristics.
External Link(s)

Registration Citation

Hooton, Christopher and Utsav Manjeer. 2022. "The Value of Digital Advertising for SMBs." AEA RCT Registry. April 12.
Experimental Details


Increase, decrease, and hold constant ad-spend per user for a random subset of target users for each advertiser.
Intervention Start Date
Intervention End Date

Primary Outcomes

Primary Outcomes (end points)
Number of purchases made, value of purchases made, number of unique users making purchases.
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
Conversions other than purchases made
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
We will randomly assign a subset of target users to be targeted by effectively higher and lower ad budgets, respectively, from the advertiser. In either case, we will compare outcomes with unaffected users under a business-as-usual ad budget regime.
Experimental Design Details
Randomization Method
Randomization implemented by internal computer algorithm
Randomization Unit
Target user of an advertising business
Was the treatment clustered?

Experiment Characteristics

Sample size: planned number of clusters
225,000 advertisers
Sample size: planned number of observations
372 million users
Sample size (or number of clusters) by treatment arms
93 million users
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Based on our power calculations, our sample size and number of clusters provides us the capacity to detect at least a 5% increase in purchase events (our main outcome) if a true effect of that size exists.

Institutional Review Boards (IRBs)

IRB Name
Facebook Research Review
IRB Approval Date
IRB Approval Number
Analysis Plan

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Post Trial Information

Study Withdrawal

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Is the intervention completed?
Data Collection Complete
Data Publication

Data Publication

Is public data available?

Program Files

Program Files
Reports, Papers & Other Materials

Relevant Paper(s)

Reports & Other Materials