Short-term effects of advertising
(Assmus et al., 1984; Tellis, 1988)
- Controlling for other influential variables, such as the ad-quality or
price, each input of advertising can generate a proportional response within a
short period of time.
- There is a simultaneous nature of the relationship between sales and
advertising; not only are sales influenced by advertising, but advertising is
also influenced by sales.
Long-term effects of advertising
(Palda, 1966; Clarke, 1976; Leone, 1995)
- Continued brand preference, though probably maintained by satisfaction
with the quality of the product, may have its origin in the action of a
single, long-forgotten ad.
- Most advertising effects dissipate after three to fifteen months.
Advertising Response Functions (Simon and Arndt, 1980)
- Returns of advertising are usually diminishing no matter how much
money is spent.
- Many firms are overadvertising even though the marginal advertising
response is very low in a considerable number of situations.
(Krugman, 1972; Naples, 1979)
- In general, around three exposures to an advertisement within a purchase
cycle are adequate to lead to or maintain the desired level of brand awareness
or brand attitude.
- While the "three-exposure rule" is an average tendency, smaller or
new brands should have a higher frequency than larger or established brands