Which Ad Works, When, Where, and how Often? Modeling the Effects of Direct Television Advertising

Abstract

The authors develop a model to decompose the effects of television advertising for a toll-free referral service, at the hourly level. The model estimates which ad works, when, in which station, and for how long. Results of the analysis show that ads do stimulate direct response, but their effects dissipate very rapidly. Effectiveness and profitability vary substantially by creative, television station, and station x time of the day. The results underscore the need for managers to undertake such analyses and for researchers to use such a disaggregate approach.