Advertising Saturation: Diminishing Returns Effect
Increasing the amount of advertising increases the percent of the audience reached by the advertising, hence increases demand, but a linear increase in the advertising exposure doesn’t have a similar linear effect on demand. Typically each incremental amount of advertising causes a progressively lesser effect on demand increase. This is advertising saturation. Saturation only occurs above a threshold level that can be determined by Adstock Analysis.
For e.g. for the ad copy in the above graph, saturation only kicks in 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.
Read more about this topic: Advertising Adstock
Famous quotes containing the words advertising, diminishing, returns and/or effect:
“The same people who tell us that smoking doesnt cause cancer are now telling us that advertising cigarettes doesnt cause smoking.”
—Ellen Goodman (b. 1941)
“I take it that the good of mankind means the attainment, by every man, of all the happiness which he can enjoy without diminishing the happiness of his fellow men.”
—Thomas Henry Huxley (182595)
“The insolence of base minds in success is boundless; and would scarce admit of a comparison, did not they themselves furnish us with one in the degrees of their abjection when evil returns upon them.”
—Laurence Sterne (17131768)
“It has never been in my power to sustain ... I can pass swiftly from one effect to another, but I cannot fix one, and dwell on it, with that superb concentration which seems to me the special attribute of the tragic actress.”
—Ellen Terry (18471928)