Measuring Media Reach and Frequency Elasticities of Demand

This paper describes a method that has been developed to measure the purchase response elasticities of media reach and frequency. The elasticities permit the assessment of the expected percent change in a brand's sales as a function of a given percent change in either or both the reach and frequency of proposed media plans and provide guidance towards the choice of the most effective media schedule. The method that is described is based on a mathematical model that isolates the effect of advertising on the basis of split-cable TV data and a surface response methodology approach. The development of the elasticities is illustrated on the basis of an actual market situation, and the media allocation implications are discussed.