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What is Adstock? A Guide for Advertisers

Winston Li
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Understand the Role of Adstock in Advertising Decisions

Optimizing the purchase path is one of the most challenging tasks for an advertiser. Depending on the industry, your customers could spend months researching and comparing products before making a buying decision, and it’s essential for advertisers to ensure that they are visible and clearly remembered during this process. This prolonged or lagged effect of advertising on consumer purchase behaviour, known as the Adstock effect, is an essential component of optimizing the marketing mix as it informs the advertiser how long they need to be in the market and how to find the right balance between long and short-term focuses.

 

The diagram below shows a client’s media plan for a 52-week period. The year started with a six weeks campaign (week 0-6), where the client planned to spend 100-150 per week (grey bars). However, the effect of adstock (blue curve) changes the actual outcome drastically. In Week 0, a handful of customers with shorter paths to purchase have responded, but the Return On Advertising Spend (ROAS) doesn’t pick up until much later. Weeks 4-6 see a surge in conversions, driven by both immediate responders (those who saw the ad recently) and slower decision-makers who were exposed to the campaign earlier. The beauty of adstock is that even after the campaign ends (weeks 7-10), you'll still see sales coming in. 

Advertising adstock transformation - a graph shows the effect of adstock over time

Measuring Adstock for Effective Marketing Mix Modeling

For each media channel, adstock is typically measured as a decay rate (a percentage between 0% and 100%). This rate indicates how much impact from the previous week carries over. Here's a breakdown:

0% adstock: No information retention. Customers either buy immediately or never will.

100% adstock: Perfect information retention. One exposure ensures the customer remembers your message forever. (Neither of these extremes is realistic.)

Let's see how adstock levels affect purchase cycles across three media channels:

Adstock Champions: Which channels perform the best? 

The Takeaway

By understanding adstock, you can leverage marketing mix modeling platforms to create a powerful media mix that considers both short-term sales and long-term brand building. By strategically combining channels with varying adstock strengths, you can ensure your brand stays at the forefront of your target audience's mind throughout their purchase journey.

Get started today by booking a demo with Arima. 

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