Abstract:

An aggregate, numerical model is proposed to assess the effects of advertising. It is intended as an aid to advertisers and to an advertising agency. The main decisions it assists are about the size and allocation over time of the advertising budget, the evaluation of its effects - and the price of the brand. Several years of experience in trying to measure how advertising works are summarised in the application of the model. The parameters estimated from data about the brand and its market are used in a series of sub-models which help practical decisions. The research data needed are described, as is the approach to the analysis of each individual case. The examples and references given cover a cross-sectional description of brands' position in a market, the estimation of the return on advertising, different shapes of response function, determining the direction in which to change the advertising budget, and how long it is likely to take for the volume sales and profit benefits to be seen.