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  4. December 2025
  5. The Consumer Welfare Effects of Online Ads: Evidence from a Nine-Year Experiment

American Economic Review: Insights

ISSN 2640-205X (Print) | ISSN 2640-2068 (Online)

The Consumer Welfare Effects of Online Ads: Evidence from a Nine-Year Experiment

  • Erik Brynjolfsson
  • Avinash Collis
  • Daniel Deisenroth
  • Haritz Garro
  • Daley Kutzman
  • Asad Liaqat
  • Nils Wernerfelt
American Economic Review: Insights
vol. 7, no. 4, December 2025
(pp. 447–62)
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Abstract

Research on the effects of online advertising on consumer welfare is limited due to challenges in running large-scale field experiments. We analyze a long-running field experiment on Facebook in which a random subset of users received no ads in their newsfeeds. Using an incentive-compatible deactivation experiment, we find no significant differences in users' valuation of Facebook across a representative sample of 53,083 Facebook users in the ads and no ads groups. Our sample size allows for precise estimates, suggesting that either the disutility of ads is relatively small or that there are offsetting benefits, such as product discovery.

Citation

Brynjolfsson, Erik, Avinash Collis, Daniel Deisenroth, Haritz Garro, Daley Kutzman, Asad Liaqat, and Nils Wernerfelt. 2025. "The Consumer Welfare Effects of Online Ads: Evidence from a Nine-Year Experiment." American Economic Review: Insights 7 (4): 447–62. DOI: 10.1257/aeri.20240452

Additional Materials

JEL Classification

  • C93 Field Experiments
  • D12 Consumer Economics: Empirical Analysis
  • D44 Auctions
  • L82 Entertainment; Media
  • M37 Advertising