Advertising adstock

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Advertising adstock or advertising carry-over is the prolonged or lagged effect of advertising on consumer purchase behavior. Adstock is an important component of marketing-mix models. The term "adstock" was coined by Simon Broadbent.^[1] Adstock is a model of how the response to advertising builds and decays in consumer markets. 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 them 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. There are two dimensions to advertising adstock:

1. decay or lagged effect.
2. saturation or diminishing returns effect.