Some observations on the impact of advertising on demand

This article examines the decay structure of advertising and the incorporation of advertising in systems of demand equations by scaling and translating methods. Under the assumption that a consumer's purchase of an advertised product is directly related to his|her recall of a specific advertisement, the decay effect of advertising for everyday products is a monotonic decreasing function of time. In the scaling model, advertising has a tendency to be more effective when demand is price elastic (inelastic) given a quantity augmenting (diminishing) type scaling impact. In the translating model, the impact of advertising is related to the marginal propensity to consume.