[1] Adstock is a model of how the response to advertising builds and decays in consumer markets.
The adstock theory hinges on the assumption that exposure to television advertising builds awareness in the minds of the consumers, influencing their purchase decision.
This decay effect can be mathematically modelled and is usually expressed in terms of the ‘half-life’ of the advertising.
A ‘two-week half-life’ means that it takes two weeks for the awareness of advertising to decay to half its present level.
Typically, each incremental amount of advertising causes a progressively lesser effect on demand increase.
For example, for the ad copy in the above graph, advertising saturation is achieved above 110 GRPs per week.
Adstock can be transformed to an appropriate nonlinear form like the logistic or negative exponential distribution, depending upon the type of diminishing returns or ‘saturation’ effect the response function is believed to follow.
[6] Studies show long and expensive campaigns, result in competitive clutter, when several brands advertise simultaneously, competitive interference depreciates campaign accessibility and makes individuals forget the message more quickly.
[7] Observations show noticeable wear-out effects as carry-overs are shortened when brands air multiple campaigns and/or increase the size of their advertising budget.