Effectiveness of Advertising Campaigns on Short-Form Video Social Platforms: An Empirical Analysis through a Large-Scale Randomized Field Experiment on ByteDance

Short-form video has taken over social media and attracted attention from advertisers. As brands shift their advertising spending to short-form video social platforms, doubts remain about the advertising efficacy on these platforms, especially given the skyrocketing advertising costs in recent years. In a large-scale randomized experiment on ByteDance in collaboration with an automobile brand, we show a significant effect of the advertising campaign on ByteDance, compared with effects reported in other studies. Exposed users are eight times more likely to convert from outside than from within ByteDance, which raises the importance of information sharing between the platform and brands. When considering conversions outside ByteDance, the average cost per conversion, which brands commonly use to evaluate the cost of campaigns, shrinks by 5 or 25 times, depending on the methods used to calculate it. Information sharing can also affect a brand’s targeting strategy. While commonly used demographic variables by the automobile brand are effective for target marketing with only platform data, they are not when considering conversions outside ByteDance. Instead, a behavioral variable proposed herein (prior brand home page visits) effectively moderates the advertising effect but has no effect when including only platform data in the analysis.