Академический Документы
Профессиональный Документы
Культура Документы
Advertising elasticity of demand is a measure of how much advertising expenditure affects the demand for a good or service. Advertising elasticity of demand (AED) is a useful measure of advertising effectiveness. It measures the percentage change in demand for the product or service compared to the percentage change in the level of advertising expenditure.
Formula:
The value that is derived as a result for the advertising elasticity will vary from zero to infinity. As before, the now familiar descriptions are used: Value 0 Under 1 1 Over 1 Infinity Description Perfectly inelastic Inelastic Unitary Elastic Perfectly elastic
The purpose of a lot of advertising may not be to directly boost demand, but to help with building a brand image or brand loyalty - the AED value cannot show the effectiveness of this strategy If dealing with a family of brands, it may be difficult to isolate the effect of the advertising spending on a single product or service and this may distort the apparent effectiveness of the expenditure It may be difficult to isolate the impact of advertising expenditure to a specific time period - some campaigns are ongoing over a considerable period and other factors may also influence demand over an extended period