Econometrics: The case for long-term advertising

This article describes how econometrics modelling can be used to substantiate claims of advertising having a longer-term impact on sales.

Econometrics: The case for long-term advertising

Matt Clary and Paul DysonData2Decisions

Econometrics provides a compelling case for the positive long-term impact of advertising on sales, but to measure it requires rigorous data analysis and a category-specific understanding of what long-term vs. short-term effects are.

Like many investments made in business, the financial return from advertising isn't always immediate. Many econometrics studies have shown that the short-term return on advertising is often less than the investment itself, especially for FMCG and consumer packaged goods (CPG). So, advertisers put their faith in the 'long-term' benefit of advertising to justify the investment,...

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