@techreport{Naik2008Heterogeneous,
abstract = {De Fleur (1956) provides the earliest evidence of diminishing returns. He finds a common
logarithmic pattern for leaflets dropped and message recalled in field experiment. Since then,
many researchers have applied logarithmic or square root patterns to capture the effect of
diminishing returns with their advertising response modeling across different media. But
discussions with managers support the notion that the diminishing returns to incremental dollars
spent on one medium (say, television) are not likely to be the same as those for equivalent dollars
spent on other media (e.g., Print). But if diminishing returns indeed vary across media, how does
that change the resulting allocation recommendation? To address this issue, we derive a dynamic
model that captures the notion of differential diminishing returns and disentangles it from closely
related notions of differential carryovers and differential ad effectiveness. Second, we develop a
systematic method to estimate the model's parameters using market data and illustrate
empirically that all three effects, diminishing returns, carryover and ad effectiveness vary across
the four media employed. Finally, we investigate the normative implications for managerial
decision-making. Here, we additionally account for varying media buying efficiencies across
media. Taken together, the approach and its illustration should provide managers with a better
toolkit to allocate their multimedia budgets.},
address = {Kiel und Hamburg},
author = {Prasad A. Naik and Kay Peters and Kalyan Raman},
copyright = {http://www.econstor.eu/dspace/Nutzungsbedingungen},
keywords = {330},
language = {eng},
publisher = {ZBW - Deutsche Zentralbibliothek f\"{u}r Wirtschaftswissenschaften, Leibniz-Informationszentrum Wirtschaft},
title = {Heterogeneous Response Functions in Advertising},
type = {Arbeitspapiere des Lehrstuhls f\"{u}r Innovation, Neue Medien und Marketing},
url = {http://hdl.handle.net/10419/27679},
year = {2008}
}

