Understanding Adstock and Carryover Effects

The Adstock Concept

When a consumer sees a TV ad today, they may not purchase immediately but the ad influences them over the coming days and weeks. Adstock models this decay mathematically.

Geometric Adstock

The simplest form:

Adstock(t) = Spend(t) + λ × Adstock(t-1)

Where λ (lambda) is the decay rate (0 to 1). Higher λ = longer carryover.

Typical decay rates:

• TV: 0.7-0.9 (long carryover)
• Digital Display: 0.3-0.5 (short carryover)
• Search: 0.1-0.3 (very short)
• Print: 0.5-0.7 (medium)