Adstock

Adstock is the modelling concept capturing that advertising effect does not stop at the moment of exposure but carries over: part of this week's effect is the echo of previous weeks. Econometric models capture this in a decay rate, the carry-over, which sets how fast the built-up effect fades. The concept matters practically for two reasons. Without adstock a model structurally underestimates what brand-oriented media do, because their effect lives precisely in the carry-over. And the chosen decay rate is an assumption that steers the outcome considerably; anyone reading model results should ask about it.

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