Advertising adstock is a term coined by Simon Broadbent [1] to describe the prolonged or lagged effect of advertising on consumer purchase behavior. It is also known as 'advertising carry-over'. Adstock is an important component of marketing-mix models.

Advertising tries to expand consumption in two ways; it both reminds and teaches. It reminds in-the-market consumers in order to influence their immediate brand choice and teaches to increase brand awareness and salience, which makes it easier for future advertising to influence brand choice.

Adstock is the mathematical manifestation of this behavioral process. The adstock theory hinges on the assumption that exposure to television advertising builds awareness in the minds of the consumers, influencing their purchase decision.

Each new exposure to advertising builds awareness and this awareness will be higher if there have been recent exposures and lower if there have not been. In the absence of further exposures adstock eventually decays to negligible levels.

Measuring and determining adstock, especially when developing a marketing-mix model is a key component of determining marketing effectiveness. The underlying theory of adstock is that the exposure to television advertising builds awareness in the consumer markets , resulting in sales. Each new exposure to advertising increases awareness to a new level.

The decay effect of adstock eventually reduces awareness to its base level, unless or until this decay is reduced by new exposures. Every Ad copy is assumed to have a unique half-life. Some academic studies have suggested half-life range around 7— 12 weeks, [2] while industry practitioners typically report half- lives between 2—5 weeks, with the average for Fast Moving Consumer Goods FMCG Brands at 2.

Adstock half-life can be estimated through a distributed lag model response with lags of the TV Gross Ratings Point GRP variable, using Least Squares. Inclusion of the A t -1 term, this.

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This is a simple decay model, because it captures only the dynamic effect of advertising, not the diminishing returns effect. Typically each incremental amount of advertising causes a progressively lesser effect on demand increase.

This is advertising saturation.

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Saturation only occurs above a threshold level that can be determined by Adstock Analysis. The advertising carryover effect is a famous and debated effect of business marketing practices.

Essentially, the carryover theory states that the positive benefits from advertising, especially increased sales, are not perfectly in step with advertising movements but rather delayed and spread out over time so that changes may not be noticeable immediately or measurable right after the advertising strategy has gone into effect.

This establishes that consumer involvement has a noticeably positive impact on carry-over, as involved consumers have a better memory for commercials. These results are noteworthy because it shows that advertising intensity, competitive interference and wear-out effects have impacts on advertising effectiveness. From Wikipedia, the free encyclopedia. Retrieved from " https: Advertising terminology Marketing performance measurement. Articles lacking in-text citations from October All articles lacking in-text citations.

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