The Demand Effects of Joint Product Advertising in Online Videos

Joint product display in videos may help customers to not only evaluate the attributes of products that can influence their individual demands (direct effect) but also learn about the complementarity between them that may cause additional correlation in their demands (spillover effect). To estimate the demand effects, we introduced videos displaying apparel with matching accessories for a few randomly selected apparel on a fashion retailer's website. We found that introducing a video resulted in a 14.5% increase in apparel sales and a 28.3% increase in accessories sales. The estimated increase in accessories sales was largely attributed to the spillover effect of videos. Moreover, introducing videos with other product promotions resulted in a significantly higher effect of videos on product demands. Overall, we show how video display of related products can increase their demands in an online product network.