Frontiers

This paper runs a large-scale field experiment on restaurants to understand which types of businesses gain more from digital advertising. Measuring the returns of advertising opportunities continues to be a challenge for many businesses. We design and run a field experiment on a large review platform across 18,294 firms in the restaurant industry to understand which types of businesses gain more from digital advertising. We randomly assign 7,209 restaurants to freely receive the platform’s standard ads package for three months. The scale of the experiment gives us a unique opportunity to assess the heterogeneity in advertising effectiveness across a variety of business attributes. We find that restaurants that receive advertising observe on average a 7%–19% increase in a wide range of purchase intention outcomes, as well as a 5% increase in customer reviews. We find that gains are heterogeneous across firms, with independent and higher-rated businesses observing larger gains, as well as those with more reviews and higher pre-experiment organic traffic. History: Olivier Toubia served as the senior editor for this article. This paper was accepted through the Marketing Science: Frontiers review process. Supplemental Material: The data and e-companion are available at https://doi.org/10.1287/mksc.2023.1436 .