Performance evaluation of Adstock models using market drivers in the consumer packaged goods (CPG) industry

K. Antony Arokia Durai Raj, Balasubramanian Kanagasabapathi, Suyashi Shrivastava, Kunal Krishnan and Mitul Shah

International Journal of Electronic Marketing and Retailing, 2012, vol. 5, issue 2, 173-186

Abstract: The impact that advertising has over consumer awareness and in turn on sales volume is called as Adstock. It means stocking the advertising activity by integrating prior advertising expenditures into a stock variable and considering 'carry-over effect' over the years. Adstock is not an aggressive plan to augment sales. Rather, it is a planned activity to keep the sales steady over a given period, increase awareness and strengthen brand equity. Planned scheduling and execution of budget spending in achieving this advertising goal dictates the growth or decay in sales of a product. This research focuses on measuring the Adstock using television gross rating points (TV-GRP) and non-TV media variables by using different methods available to model Adstock. In this study, we investigated the models available in the literature describing the 'decay-effect' over a given period on live data from the consumer packaged goods (CPG) company. In addition, we have presented modified forms of the S-shaped curve model and the exponential model. The proposed exponential model with both TV-GRP and non-TV media as independent variables has shown superior performance over the other models. All the results have been computed using the Statistical Analysis System (SAS) Enterprise Guide 4.1.

Keywords: adstock models; consumer purchase behaviour; advertising carry-over; GRPs; gross rating points; forecasting; consumer awareness; television; TV-GRP; half-life; market mix modelling; performance evaluation; CPGs; consumer packaged goods; sales volumes; advertising activity; prior expenditure; advertising expenditure; stock variables; brand equity; budget spending; advertising goals; product sales; sales growth; sales decay; non-TV media; media variables; decay-effect; live data; exponential models; S-curve model; independent variables; SAS; Statistical Analysis System; electronic marketing; e-marketing; electronic retailing; e-retailing. (search for similar items in EconPapers)
Date: 2012
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