Abstract:

Measuring and modelling advertising effectiveness have attracted considerable attention from researchers and practitioners. This paper presents development, testing and applications of a new market model for advertising effect. It represents an extension of a model developed by Rice and Davis (1993) for the Canadian Media Directors' Council. The dynamic advertising effects are modelled by a modification of the adstock approach. Many advertising and media practitioners pose questions such as: How can effect modelling by applied to problems in advertising and media other than for assessing advertising effectiveness? A case study exemplifies some applications of the model for optimising the media plan: Advertising budget setting, required budget to sustain effectiveness objectives, and allocating the budget over time.