Essays on digital marketing strategies: an analytical investigation

Gecer, Gökhan

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URN: urn:nbn:de:bsz:180-madoc-600173
Document Type: Doctoral dissertation
Year of publication: 2021
Place of publication: Mannheim
University: Universität Mannheim
Evaluator: Kraus, Florian
Publication language: English
Institution: Business School > Marketing (Raffée 1969-1994, Em)
License: CC BY 4.0 Creative Commons Attribution 4.0 International (CC BY 4.0)
Subject: 600 Technology
650 Management
Keywords (English): customer lifetime value , customer-base analysis , mobile purchasing adoption , multi-channel sales , ad-blockers , content production , game theory , competitive markets
Abstract: In the first paper, we have focused on the publisher strategies against ad-blockers. Ad-blocking technologies are increasingly adopted by consumers. For content producers whose major source of revenue is advertising, this creates a challenge for survival. Facing the threat from ad-blockers, content managers are implementing a range of strategies, ranging from declining to serve customers who install ad-blockers to asking them to be paid subscribers. In this study, we consider the impact of content managers’ strategies against the ad-blockers based on the differentiation of content in online media. Our findings suggest that publishers decide on their strategies against ad-blockers based on their content production cost and content differentiation. A publisher that produces differentiated content for a low cost, such as personal blogs, follows the “content wall” strategy where they do not give access to those who use ad-blockers while other publishers follow the “pay to avoid” strategy where they offer an ad-free version of the website. Content differentiation is also important for the publishers that produce content for a high cost. In this case, content production is profitable only when the content is differentiated. We also show that competition does not increase content quality all the time. A monopolistic company that produces its content for a low cost decreases its content quality when a new publisher produces substitutable content. Last but not least, when the ad-giving firm is a decision maker, the decision process of the publisher is restricted. In the second paper, we focus on discounting strategies through different sales channels. Customer engagement with mobile devices has changed customers’ habits in online purchasing, in particular the usage of mobile apps for shopping increases the customer lifetime value (CLV). Based on a quasi-field experiment, we show that once customers start using their mobile devices to purchase, they adopt this channel and keep purchasing through it. Also, we support the literature showing that purchasing over mobile apps increases the customer lifetime value (CLV). Hence, we suggest the idea that online retailers should steer their customers to the mobile channel by offering a permanent discount over the mobile app. Although this strategy decreases the short-term income, it may increase the CLV. Based on this suggestion, we develop a probability-based CLV model to show to what type of customers an online retailer should offer a discount over the mobile app as well as the optimal value of that discount. Following an analytical modeling approach, we are able to show that the online retailer should offer such a discount to a customer who is either very likely or unlikely to increase her purchasing probability. Also, the firm could offer such a discount to encourage the customer to switch to the mobile app. Online retailers should not offer the discount to those who already have a high purchasing probability because their CLV is already huge. Last but not least, an online retailer should not follow this strategy to gain new customers (customer acquisition) but rather apply it to increase customer retention.

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