Advertising Adstock - Advertising Saturation: Diminishing Returns Effect

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:

    Remove advertising, disable a person or firm from preconising [proclaiming] its wares and their merits, and the whole of society and of the economy is transformed. The enemies of advertising are the enemies of freedom.
    J. Enoch Powell (b. 1912)

    From the point of view of the pharmaceutical industry, the AIDS problem has already been solved. After all, we already have a drug which can be sold at the incredible price of $8,000 an annual dose, and which has the added virtue of not diminishing the market by actually curing anyone.
    Barbara Ehrenreich (b. 1941)

    A man’s labour is not only his capital but his life. When it passes it returns never more. To utilise it, to prevent its wasteful squandering, to enable the poor man to bank it up for use hereafter, this surely is one of the most urgent tasks before civilisation.
    William Booth (1829–1912)

    Other countries drink to get drunk, and this is accepted by everyone; in France, drunkenness is a consequence, never an intention. A drink is felt as the spinning out of a pleasure, not as the necessary cause of an effect which is sought: wine is not only a philtre, it is also the leisurely act of drinking.
    Roland Barthes (1915–1980)