How does advertising affect loyalty?

Date of publication: June 1, 2008


Understanding and measuring advertising and buyer loyalty have both been on marketers' agendas for many decades. However, the act of bringing the two agendas together has been limited due to the data requirements associated with doing so appropriately. While Project Apollo has ceased, it has left behind an incredibly valuable pure single source data set that allows us to explore individual's loyalty and buying behaviour in relation to advertising exposure within different windows. We demonstrate a new approach to analysis, which focuses on a key parameter (Phi) from the Beta Binomial Distribution, which can be used to better understand the relationship between advertising and purchase probabilities (a measure of Latent Loyalty). The new approach demonstrates that we have much to learn about advertising and that such data is incredibly powerful in terms of its ability to measure relationships that we could only guess at before this Single Source data was available.

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