Predicting and optimizing advertisement spending through Adstock model

Category : Marketing Analytics

Media

CONTEXT

Advertisement spending for a travel company had to be optimized by a media company. The ad-spend was spread across three media, namely TV, Radio, and Catalog. The historic GRP and Ad-spend data was made available by a third-party vendor.

RESOLUTION

Our consultants used a variation of the Adstock model in order to predict the decay of customer interest after the issuance of advertisement campaigns. The advertisement spend was optimized by issuing advertisements only at those points in time where the decline in customer interest were imminent.

RESULT

The effectiveness of the advertisements was improved, and the ad spend was reduced by five percent. It was found that increasing the frequency of TV advertisements helped significantly increase net booking value.

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