Optimal Periodic Advertising
Operations Research, Forthcoming
Extant models assume that awareness decline commences instantly. In contrast, we incorporate the possibility that awareness declines with a delay due to the memory for advertisements. To this end, we use delay differential equations to understand the evolution of awareness in the presence of ad memorability. This extended model generates optimal advertising policies that include the even spending policy, blitz policy, and various cyclic pulsing policies, depending on whether ad memorability exceeds a critical threshold. The extended model not only unifies the various patterns of advertising spending over time, but also augments the prior research by furnishing the optimality of pulsing advertising. Thus ad memorability could drive pulsing. We discuss the implications for practicing managers and identify avenues for future researchers.