ADMOD: An Advertising Decision Model

Author(s): David A. Aaker

Source: Journal of Marketing Research, Vol. 12, No. 1 (Feb., 1975), pp. 37-45
Published by: American Marketing Association
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 DAVID A. AAKER*

ADMODis an advertising decision model which is designed to address simultaneously

the budget decision, the copy decision, and the media-allocation decision. The
model, which focuses upon specific consumer decisions that advertising is attempting
to precipitate, is illustrated with an example.

ADMOD: An Advertising Decision Model

This article describes an Advertising Decision Mo-
del, termed ADMOD. The model is designed to make
media-allocation decisions. However, its thrust differs
from most other media models in two respects: (1)
it includes the copy decision and the budget decision,
and (2) it relies upon a different operational conception
of the advertising process.
A MORE COMPREHENSIVE MODEL
There are three tactical advertising decision areas:
the media budget, the budget allocation, and the copy
decisions. Previous research into these decision areas
has been remarkably isolated. Budget-setting models
have generally used experimental design or statistical
models, usually ignoring copy considerations or media
placement. Media models have normally considered
the budget to be fixed and similarly have ignored copy
decisions, which generally involved different research
traditions.
That interdependencies exist hardly needs demon-
stration. First, the optimal budget level will clearly
depend upon the creative effort. For ineffective ad-
vertising, the optimal level may be zero. One type
of copy approach will require a different level of
exposure intensity than another. Second, the budget
level will depend upon the type of media used and
how effectively the target segments can be reached.
Finally, recent research has demonstrated the interac-
tions between copy and media scheduling. In particu-
*David A. Aaker is Associate Professor of Business Administra-
tion, University of California, Berkeley. The author would like
to thank the W. R. Simmons Company for making data available
and Christopher Sprague and Leon Liebman of Interactive Market
Systems Incorporated who provided convenient access to it. Thanks
are also due to the Institute of Business and Economic Research
for their research support and to Alex Chow for his able programming
assistance and to the JMR reviewers for their helpful comments.
37
lar, the studies by Ray and his colleagues [12, 13,
14] on repetition and Aaker and Brown [5] on vehicle
source effects have shown that the assumption that
these dimensions of analysis can be considered
independently of copy effects is far from reasonable.
Together with the classic work of Starch [18] on
advertising readership, they suggest that media-alloca-
tion models should take the copy decision into account
more explicitly.
There are, of course, good reasons why these
interactions have been largely ignored in the past.
First, the three areas are usually the responsibility
of different decision makers. Firm managers set the
budget, agency media specialists allocate the budget
to media alternatives, and creative people make the
copy decisions. There is little pressure, therefore, to
integrate. Instead, a demand exists for independent
efforts to aid these decision makers. Second, there
have been technical and conceptual problems in the
development of the machinery oriented toward media
allocation and copy decisions, even when they are
considered independently. Therefore, it has been pro-
ductive to make advances in these areas. Indeed, it
is questionable whether any real effort toward an
integrative approach would be feasible without the
advances that have been achieved to date in media
models, copy testing, and related techniques. Finally,
when media allocation or copy decisions are consid-
ered separately, the measures used need have only
relative validity, since alternative choice is the goal.
When budget decisions are introduced, a measure with
validity in an absolute sense is necessary and new
demands are imposed upon researchers.
It is now appropriate to address the budget, the
media, and the copy decisions in concert. The intro-
duction of modern information systems supported by
on-line computers and model banks are effectively
breaking down the isolation of the different decision
makers. The media model technology is at the point

Journalof MarketingResearch
Vol. XII (February 1975), 37-45

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38
where it has achieved acceptance and demonstrated
considerable validity. Progress has been made in
understanding the communication process, in setting
objectives, and in testing copy against these objectives.
With barriers reduced, it is useful to push the field
in the direction of more ambitious models.
A DIFFERENT VIEW OF THE ADVERTISING
PROCESS
Most media models rely upon a model of advertising
which suggests that advertising creates an advertising
exposure (or some similar construct) which, in turn,
creates sales. The advertising exposure level will
dissipate over time but can be maintained or built
up by more advertising. The heart of the model, then,
is an aggregate response curve that relates exposure
levels to sales (i.e., [8, 9]), or perhaps advertising
expenditure levels to sales directly. ADMOD, in con-
trast, has a more disaggregative view of the advertising
process. It focuses upon specific consumer decisions,
which have long-run implications for the firm, that
advertising is attempting to precipitate. For example,
advertising may be directed toward inducing a con-
sumer to try a brand for the first time, to try a brand
in a new way, to change his brand attitude, or to
become aware of the brand. Such consumer responses
will tend to generate a future sales or profit stream
to the firm which represents a certain present value.
For instance, an attitude change may be linked to
an increase in loyalty that will have an estimable effect
upon purchases over time. A trial purchase will result
in a subsequent purchase sequence which can be
similarly estimated (for example, see [2]).
The concern of advertising is then upon some
indicator of the probability of the consumer changing
his cognitions in the desired way or taking the desired
action. When the objective is to obtain new customers,
an appropriate measure might be the intention to buy.
Alternatively, the measure could be based upon some
variable causually linked to intention to buy. For
example, it may be that brand name awareness, or
knowledge of a brand attribute, or familiarity with
a jingle may be closely linked to intentions to make
a trial purchase [6]. In any case, a construct is
developed that may provide the dependent variable
in studies used to estimate the various parameters
in the advertising decision model. This construct will
tend to be more operational than aggregate sales, partly
because it will enable the researcher to exploit copy
testing methodology more fully.
ADMOD
The goal of ADMOD is to select a budget level,
a copy approach, and a media insertion schedule to
maximize the objective function. The task of the
objective function is to assign a value to a given media
insertion schedule. A selection heuristic has the task
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JOURNALOF MARKETINGRESEARCH,FEBRUARY1975
of generating the various insertion schedules to be
evaluated.
The Objective Function
The focus of the ADMOD objective function is
not on the aggregate vehicle audience but upon sample
populations selected from the various segments. In
evaluating an insertion schedule, ADMOD examines
its likely impact upon every individual in the sample.
The impact will depend upon the net value of the
decision or cognition change involved (the segment
effect), the number and source of exposures to the
individual created by the schedule (advertisement
exposures), and the impact of the exposures upon
the probability of obtaining the desired cognition
change or decision (the repetition function). Using
appropriate scaling factors, the result is projected to
the real population, providing the total expected profit
generated by that media schedule.
A sample is thus required from each segment. A
representative sample of the whole population is not
necessary. The proportion of people in the sample
from a certain segment need not equal the proportion
of the population contained in that segment. The only
requirement is that a reasonable number of people
from each segment- 100 to 200, for example-be part
of the sample. Of course, the sample should be
representative of each segment. Ideally, each member
of the segment should have an equal chance of being
selected. When small audience media vehicles are
included, it may be useful to increase the sample size
somewhat. The sample size from segment s is termed
ns. The total size of segment s is termed Ns.
Before proceeding further, it is useful to define
several terms. A media vehicle (indexed by j; j = 1,
..., J), such as Vogue, Time, NBC News, and Monitor
Radio, provides the immediate environment for the
advertisement. By specifying the vehicle, it will be
assumed here that the position of the advertisement
within the vehicle and the size of the advertisement
is also specified. Including such factors in the model
more formally would be a trivial extension. A copy
alternative (indexed by c; c = 1, ..., C) is a creative
approach. It could be the specification of refutational
copy, fear appeals, the use of experimental evidence,
or a particular awareness campaign. An insertion
option (xcj) is here defined as the insertion of a copy
alternative into a vehicle. A set of insertion options
is a media insertion schedule. A media insertion
schedule will be constrained to have only one copy
alternative; the possibility of relaxing this constraint
will be considered later in the article.
The Segment Effect
The assumed objective of the advertiser is to precip-
itate a cognitive change or decision. The long-term
value to the firm of obtaining such a result from a
member of segment s is termed w . It will be the
ADMOD: AN ADVERTISINGDECISION MODEL
present value of the projected purchasing behavior
pattern caused by the cognitive change or decision.
Model components, such as the repetition function
and vehicle source effects, are then developed using
operational measures that are linked to the objective.
To fix the concept, several examples will be presented.
Suppose the goal is to generate a trial purchase
of a brand by segment members. In this context, ws
would be the discounted profit stream expected from
a random segment member who tries the brand for
the first time. The long-term value to the firm of
obtaining a trial purchase will reflect the gross margin
of the brand, a discount factor reflecting the cost
of capital and the uncertainties of the market, the
segment member's product class purchasing volume,
and the degree of brand acceptance the brand is likely
to obtain after the use experience [4]. An estimate
of the brand acceptance can be obtained using repeat-
buy statistics or by applying a formal brand choice
stochastic model to a group of new triers. Parfitt and
Collins [10] and Aaker [2] describe two models
appropriate in this context and empirically demonstrate
their validity. Aaker [3] demonstrates a method to
link brand acceptance to descriptors of market seg-
ments which can be used even when a stochastic model
is applied to a single data base of "new triers" of
a brand. The approach could be employed to obtain
ws values for different segments.
The situation is similar when the goal is enticing
a consumer to use the product in a new application
or to use a product class for the first time. In that
context, an important determining factor in ws will
be the consumer's acceptance of the new application
after he is induced to try it. Statistics reflecting the
time until the second or third use occasion or formal
stochastic models of interpurchase time can be used
to predict acceptance levels.
The objective could be to change a brand image.
In that case, the intent could be to maintain the loyalty
of existing customers and to make them less vulnerable
to attacks from competing brands. With the existing
image, customers may have a projected purchasing
pattern that reflects a decline in purchases of the
advertised brand. It may be that a new image will
be associated with a more stable projection of pur-
chasing patterns. The present value of the difference
would then be ws. Again, the best way to determine
such projections is by observing the actual purchasing
decisions of those who changed their perceptions of
a brand. It may be that attitude theory will ultimately
be helpful in providing such projections with less
demanding data requirements.
Determining Exposures to the Schedule
The insertion schedule will generate exposures that
will have some impact upon the objective of the
advertising campaign. In this section, the exposure-
generating aspect of the insertion schedule, which
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39
involves vehicle and advertisement exposure probabil-
ities, will be developed.
Let bij be the probability that individual i will be
exposed (with exposure carefully defined) to the
vehicle j under consideration. It is assumed that the
b i,remain stable through the time period of the planned
campaign. (For a discussion of this assumption, see
[16].) Let hc. be the conditional probability of an
exposure (again, with a suitable definition) to an
advertisement using copy alternative c in vehicle j,
given that an exposure to vehicle j has been obtained.
The latter term will depend upon the vehicle and the
copy. Some vehicles have a higher advertisement
exposure among their audience than others, and some
creative approaches are more capable than others of
attracting attention. It might be useful to condition
hl1 upon the type of individual involved. However,
the notation is already cumbersome and such exten-
sions should be obvious. Thus, the probability that
individual i reads a particular issue of Good House-
keeping would be b j, and the probability that an
advertisement using copy approach c is exposed, given
the vehicle is read, would be hcj
The product of these two terms, b. hcj, reflect the
probability that individual i will be exposed to an
advertisement using copy approach c in vehicle j.
Let:
Pcij= bijhcj,
where:
Pcij = the probability that individual i is exposed
to insertion option x.,
bij = the probability that individual i is exposed
to vehicle j,
hc = the probability that anyone exposed to
vehicle jwill be exposed to insertion option
Xcj.
Let z, be a random variable reflecting the number
of exposures received by individual i in a given
insertion schedule being considered by the objective
function. The value of zi cannot be known for sure
but, knowing the exposure probabilities, it is a
straightforward task to obtain fci(zi), the probability
distribution for z i. The distribution can be calculated
exactly by making certain independence assumptions
and applying simple probability theory. For example,
if there were only two insertions under consideration,
insertion option xc5 and insertion option Xc7, then
the probability of zero exposures would be (1 - P65) (1
- P67), the probability of one exposure would be
Pci5(1 - Pci7) + Pci7 (1 - Pc5 ), and the probabilityof
two exposures would be ci5Pc17. Similar calculations
can be made for schedules of any size. However,
with large schedules, the calculations can become
costly, and it is reasonable to consider using the raw
probabilities to estimate the parameters of a probability
40 JOURNALOF MARKETINGRESEARCH,FEBRUARY1975

function such as the binomial that would then become THEADMOD REPETITION
FUNCTION
fci(Zi).
The binomial distribution is attractive because it a' (z;)
cs
is a flexible distribution defined on positive integers
and its parameters are easily estimated.' The use of
a unimodal distribution is perfectly reasonable when
only a single individual is involved, as it is in this
context. In most other media models, there is the
need to model the exposure probabilities across many amax Cs
individuals. When individuals are aggregated the re-
sulting probability distribution is inevitably multimod-
al. As a result it is nearly impossible to model well
with any tractable distribution. This fact motivates
the use of a population sample in ADMOD.
The Repetition Function and Forgetting
ADMOD assumes that an advertising campaign of
a specified duration is attempting to change cognitions
or precipitate a decision. The campaign will generate
a certain number of exposures for each individual z.
i, z,. The impact of these exposures on the probability
of the desired response occurring is termed a' (zi),
the repetition function. The subscript s indicates that
the repetition function will be different in general for functions may be estimated by separate and different
each segment, but identical for each segment member. techniques, it is quite possible to introduce inconsistent
The subscript c reflects the fact that the repetition definitions.
function will vary with the copy approach used. An One form of the repetition function is shown graphi-
awareness campaign may require only a few expo- cally as Curve A in the figure and algebraically as
sures, whereas an attitude-creation campaign may (1). It suggests that the probability of the deserved
require several additional exposures to be effective. response, a' s(zi), will start at an initial level, moving
The prime superscript indicates that all exposures are geometrically to a higher level with successive expo-
associated with the maximum vehicle source effect, sures:
Vcj. This last assumption will shortly be relaxed.
Care must be taken to ensure that a comparable (1) acs(zi) = amincs + amaxs(1 - Xc),
definition of exposure is used in hcj, the probability where:
of generating an advertisement exposure, and in zi.
Since the two terms appear in two different contexts, aminC5 = the repetition function value in the
and since exposure probabilities and the repetition absence of any exposures,
amax^ = the limiting repetition function value
as the number of exposures becomes
large,
'The parameters of the binomial can be estimated from its mean
and variance which are:
XCS = a parameter that reflects the rate at
which the repetition function moves
p. = mean= E
from amincs to amaxcs.
Pcij
In ADMOD there is no explicit conceptualization
of forgetting. However, the development of the repeti-
(2 = variance = pij(l -
pcij) tion function necessarily takes into account the length
of the campaign and therefore the length of time
The expressions are summed over all insertions in the schedule. between exposures. Curve B in the figure, for example,
Let -r and nn be the parameters of the binomial. The estimates
of these parameters, qrand nn, would be
could reflect the fact that too few exposures will suffer
from forgetting between them.
An implicit assumption in ADMOD is that the
pA 2 campaign is totally forgotten at its conclusion. The
A. - concept is that advertising is likely either to generate
Tr- the desired change in cognitions or decision in a rather
nn limited time period or not at all. Those that "with-
The estimate of nn needs to be constrained to be less than or stand" a concentrated effort for a relatively short
equal to the number of insertions in the schedule. time will probably withstand the same campaign if

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ADMOD: AN ADVERTISINGDECISIONMODEL
it is prolonged. Therefore, this forgetting assumption
of the model may not be as extreme as it may first
appear. It would be relatively easy to relax this
assumption. It could be assumed, for example, that
the average probability of a trial purchase during
subsequent time periods would be fixed fractions of
its value in the time period of immediate interest.
The objective function would then have a value
componentfrom two or more time periods.
Another assumptionof ADMOD is that the repeti-
tion function is not sensitive to when the exposures
are received during the campaign period. To relax
this assumption, the timing of each insertion would
have to be introduced into the decision, and the
repetitionfunction would have to be conditioned on
the time pattern of exposures. Such steps would, of
course, add considerabledetail to the model.
Clearly,the determinationof the repetitionfunction
is at the heart of the model. One advantage of this
formulation is that the dependent variable of the
repetition function is well defined, assuming the ad-
vertisingobjectives are well defined. It is the probabil-
ity of a cognition change or a decision, such as a
decision to try a brand. A second advantage is that
this type of dependentvariablelends itself to laborato-
ry study. The laboratorystudy, althoughhaving exter-
nal validity problems, does enable the researcher to
explore the repetition function in a highly controlled
environment. Ray and Sawyer exposed respondents
to from one to six repetitions of text advertisements
in the context of a futuristic shopping system [12].
Among the measures of interest were attitude and
purchase intentions. Such work can not only demon-
strate useful methodology,but can also lead to repeti-
tion function norms that can help those who must
estimate parameters subjectively. As Ray [11] has
observed, however, repetition functions obtained in
the laboratoryshould, as a matter of procedure, be
tested and refined, first with field studies and ulti-
mately with market tests. (See [14] for a discussion
of a specific field study.)
The Vehicle Source Effect
The vehicle source effect reflects a vertical adjust-
ment in the repetition function, the probability of
precipitatingthe desired response as a function of
exposures. The repetitionfunction is developed under
the assumption that all exposures will be associated
with the optimalenvironment.The magazineor televi-
sion programs creating the exposures are assumed
to enhance the advertisementto the maximumextent
possible because of their audience involvement, pres-
tige, and other factors. All vehicle source effects are
assumedto be 1.0 on a 0 to 1.0 scale. Actually, vehicle
source effects will take on values between 0 and 1.0,
reflecting their relative ability to enhance or detract
from the impact of the advertisement exposure on
the likelihood of generating the desired decision or
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41
cognitive change. The vehicle source effect for vehi-
cles is termedv.j. It is conditionalon the copy approach
used. Aaker and Brown [5], for example, found that
the source effect of "prestige" and "expert" maga-
zines dependedupon whether an "image" or "reason
why" copy was used.
In ADMOD the numberof exposures an individual
receives from a given insertion schedule is known
probabilistically.However, it is not known exactly
which insertion options in the schedule are creating
the exposures. The solution is to compress the repeti-
tion functionby an amountdeterminedby the expected
value of the vehicle source effect, which is simply
a weightedaveragewith those vehicles havinga higher
probability of creating exposures having the higher
weight. The repetition function adjusted for vehicle
source effects is denoted as aci(zi). Note the absence
of the primesuperscriptand the fact that this repetition
function is unique to an individual:
(2) aci(Zi)= a's(zi) [ (Y cPi) ( p )
The effect of (2) is to reduceboth amin sand amaxcs
of (1). The researcher might believe that the vehicle
source effect will not affect amaxcs but will affect
AC.Thus, inferiorvehicle settings will tend to increase
the numberof exposures requireduntil the individual
reaches the amaxcslevel. It would be a simple matter
to reformulate (2) to adjust XCs(to move it toward
1.0) instead of adjustingthe whole repetitionfunction.
However, this version of ADMOD uses the (2) for-
mulation.
An InsertionSchedule's Value
The purpose of the objective function is to attach
a value to a media insertion schedule. The value to
the advertiserof the campaignon individualin segment
s is the value of the desired result, ws, times the
probabilitythatthe advertisingwill stimulatethat result
to occur, aci(zi). If the number of exposures were
known exactly, the expected value for one segment
memberwould be ws aci(z ). The problem is that the
exact number of exposures that an individual will
receive, given an insertion schedule, is not known.
What is known is the probabilitydistributionof the
number of exposures, fci(zi). Thus, the appropriate
procedure is to determine the expectation over zi of
wS aci(z), which yields the expected value from indi-
vidual i:
wSE aci (zi) fci(Zi)-
Zi=0
The total expected value received from the sample
in market segment s is obtained by summing over
all individualsin the sample who belong to that market
segment:Ei.s. The additionof the factor Ns / ns explic-
42
itly scales the results to the segment size. Summing
across segments Is, and subtracting the costs of the
model insertion schedule, the final objective function
is obtained. It is assumed that the insertion costs for
vehicle j are kj for all vehicle j insertions-there are
no media discounts. This assumption is made entirely
to avoid introducing more notation. The model could
handle any type of cost function.
The value of a given insertion schedule, the objective
function, can thus be written:2
V = aci (zj) fci (zj)
- formally introduce only the already mentioned con-
z-z WS 2
s s is Zi=0
where:
c = index referencing the copy alternative,
i = index referencing the individual in the
sample population,
j = index referencing the vehicle,
s = index referencing the market segment,
Ns = the size of segment s,
ns = the size of the sample from segment
s,
ws = the value to the firm of the consumer
action (i.e., a trial purchase) by a
member of market segment s,
zi = the number of exposures received by
individual i, given the insertion sched-
ule,
aci(z,) = the probability that the desired con-
sumer action (i.e., a trial purchase) will
occur, given the fact that zi exposures
occurred,
fci(zi) = the probability that individual i will
receive exactly zi exposures, given the
insertion schedule,
= the cost of an insertion in vehicle j,
ki
Xcj = the insertion of copy alternative c into
vehicle j(xc = 0, 1).
ADMOD Vs. Simulation
Because a population sample is involved, it is easy
to associate the ADMOD approach with Monte Carlo
simulation such as Gensch's AD-ME-SIM [7]. Ac-
tually, ADMOD provides a closed-form objective
function based upon expectations as to the number
of exposures and their impact upon the desired re-
sponse. In a Monte Carlo simulation, a generated set
of random numbers determines a specific exposure
pattern for a simulated individual. Such a simulation
removes inhibitions toward complexity and complete-
ness. However, simulation requires large samples
to counteract the variance introduced by the Monte
Carlo approach. The larger samples and the added
2The objective function could easily be formulated to represent
return on the advertising investment instead of total profit.
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JOURNALOF MARKETINGRESEARCH,FEBRUARY1975
complexity means that a Monte Carlo simulation model
is usually used only to evaluate a small number of
proposed media plans. A heuristic to select among
plans is usually not part of the model.
CONSTRAINTS
There is a wide variety of constraints that could
be introduced. The number of insertion options con-
sidered for a given vehicle may be limited by the
frequency with which the vehicle appears during the
time period, for example. However, here we will
kCi straint that only one copy alternative should be con-
J
sidered in any one schedule. Thus ADMOD is designed
to select an insertion schedule that will maximize V,
subject to the constraint that the selected schedule
include only one copy alternative.
It would be possible to relax the constraint that
an insertion schedule can only include one copy
alternative. If it could be assumed that two copy
approaches operate independently, that the two
campaigns would be directed at different segments,
for example, extension would not be difficult. The
more interesting situation is when several copy ap-
proaches are interspersed to the same audience. Con-
sider the possibility of using an awareness advertising
campaign first, followed by a reason-why campaign.
The problem is that now not only do the number
of exposures need to be determined probabilistically,
but also the mix between the two copy approaches.
Such a technical problem can be solved relatively
easily. The difficult task is to obtain the appropriate
repetition function. An important function of such
models as ADMOD is to identify new areas of produc-
tive research. The measurement problems associated
with this discussion are undoubtedly in that category.
THE SELECTION HEURISTIC
Because of the irregular nature of the objective
function, it is necessary to use a heuristic to search
systematically through media insertion schedules to
select one with a high value. To implement the con-
straint that any one schedule will include one copy
alternative, the heuristic will be employed for each
copy alternative. The one with the highest value will
be the one selected.
The heuristic search procedure should incrementally
add insertions until a stop signal is reached. It should
include the capability of periodically deleting insertions
that may become redundant as other insertions are
added. Suitable heuristics as described in detail in
[1, 9].
The Budget Level
Normally a budget constraint provides a stopping
signal to the heuristic. However, in this formulation
the budget level is included in the objective function.
Thus, the stopping point is reached when there no
ADMOD: AN ADVERTISINGDECISIONMODEL 43

longer exists any insertion option that will increase
the value of the insertionschedule. Alternatively,the
heuristiccould requirethat the ratioof the value added
by a marginal insertion to its marginal'cost be a
prespecified minimum.In any case, the budget level,
the cost of that final insertion schedule, is a program
output instead of an input. Its value is given by the
second term in the objective function- j kjx . It is
optimal(withinthe limitationsof the search heuristic)
in that either an increase or a decrease in the budget
level would reduce the net value of the advertising
campaignto the firm.
A MODEL APPLICATION
An advertisingdecision problemwas conceptualized
to illustrate the model and to provide a setting for
conducting sensitivity tests. The product is a set of
dishes to be sold to homemakers. Two copy ap-
proaches are considered. (For description of such
advertisements, see [5].) One is an image approach
(c = 1), and the other is a detailed,logical, reason-why
approach(c = 2). Thirteenvehicle alternatives,shown
in Table 1, were included.
The basic data were suppliedby the W. R. Simmons
Company. They include informationon media habits
and the usage levels of a wide variety of products
for over 7,000 individuals.The media informationwas
in the form of whether the respondent was exposed
to zero, one, or two successive magazine issues or
television programs.Thus, the biiterms become 0.0,
0.5, and 1.0. Such an approachminimizesrespondent
recall and interpretationdifficulties. However, the use
of only two issues sacrifices precision and the use
of actual readership instead of a direct estimate of
probabilitiesadds variance to the result [15].
An index of an orientationof housewives to cooking
and the kitchenwas developed from the product-usage
variables.It was assumed that a "nonkitchen" orien-
tation would be associated with the relatively heavy
use of fast-food carry-outestablishments,frozen din-
ners, frozen desserts, cookie mixes, instant coffee,
false eyelashes, and tennis balls, and the relatively
light use of such products as wine. A "kitchen seg-
ment" and a "nonkitchensegment" of 200 each were
selected on the basis of this index. The total size
of the segments represented by this sample was
obtained, using the projective weight associated with
individuals in the data base. It was 10.3 million for
the kitchen segment (Segment 1) and 11.5 million for
the nonkitchensegment (Segment 2).
The advertisementexposure probabilitiescondition-
al on vehicle exposure, the h c terms, were obtained
using the 1973 Starch ad norms [17]. Specifically,
the seen-associated score which is the percent who
associated the advertiser with the advertisementwas
used. The relevant norms, obtained where possible
for women and food products, are shown as Data
Set C in Table 1.
The vehicle source effect terms were generated
subjectively. A magazineimagestudy was drawnupon
(for more details see [5]), in which 30 women were
asked to identify from a list of 18 women's magazines
those they would regard as the most (and least)
"prestigious"and the most (and least) "expert" with
respect to cooking, foods, and kitchenware. The
estimates are shown as Data Set A in Table 1.
The repetitionfunction, based upon (1), has param-
eters that were also subjectively estimated. In doing
so, the research of Ray et al. [12, 13, 14] was drawn
upon. The estimates are shown in Table 2 under Run

Table 1
BASIC VEHICLEDATA

Parameter vi hc
Data set A B C D E k
Copy approach(c) 1 2 1 2 1 2 1 2 1 2
Vehicle
1. American Home .60 .50 .53 .65 .16 .16 .21 .21 .24 .16 14,250
2. Cosmopolitan .46 .40 .53 .65 .24 .24 .21 .21 .36 .24 8,250
3. Family Circle .32 .85 .53 .65 .22 .22 .21 .21 .33 .22 26,900
4. Glamour .80 .35 .53 .65 .21 .21 .21 .21 .33 .21 7,350
5. Good Housekeeping .62 .88 .53 .65 .26 .26 .21 .21 .39 .26 22,765
6. House & Garden .60 .50 .53 .65 .20 .20 .21 .21 .30 .20 8,850
7. Ladies Home Jour-
nal .68 .96 .53 .65 .26 .26 .21 .21 .39 .26 29,030
8. McCall's .52 .74 .53 .65 .28 .28 .21 .21 .42 .28 30,750
9. Parents Magazine .40 .65 .53 .65 .20 .20 .21 .21 .30 .20 13,565
10. Redbook .42 .48 .53 .65 .24 .24 .21 .21 .36 .24 19,640
11. Women's Day .48 .78 .63 .65 .21 .21 .21 .21 .31 .21 26,825
12. Good Housekeeping
(1/2 page) .46 .68 .53 .65 .15 .15 .21 .21 .23 .15 14,190
13. Ladies Home Jour-
nal (1/2 page) .48 .66 .53 .65 .12 .12 .21 .21 .18 .12 14,350

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44 JOURNALOF MARKETINGRESEARCH,FEBRUARY1975

Table 2
MEDIAINSERTIONSCHEDULES

Run 1 2 3 4 5 6 7 8 9 10 11
Copy 1 2 1 2 1 2 1 2 2 2 2 2 2 2 1 2
Parameters Segment
vc - A A B B A A A A A A A A A A A A
hcj C C C C D D E E C C C C C C C C
X 1 .55 .50 .55 .50 .55 .50 .55 .50 .40 .60 .50 .50 .50 .50 .55 .50
A 2 .60 .55 .60 .55 .60 .55 .60 .55 .45 .65 .55 .55 .55 .55 .60 .55
amax 1 .14 .16 .14 .16 .14 .16 .14 .16 .16 .16 .16 .15 .16 .16 .14 .16
amax 2 .18 .12 .18 .12 .18 .12 .18 .12 .12 .12 .12 .15 .12 .12 .18 .12
ws 1 7 7 7 7 7 7 7 7 7 7 6 5 6 8 10 10
ws 2 5 5 5 5 5 5 5 5 5 5 6 7 4 6 8 8
1
2 4 4 1 2
3 1 1 3
4 4 5 1 7
5 2 4 1 4 2 4 4 4 4 4 4 4 4 6
Insertion 6
schedule 7 2 4 1 2 4 4 2 4 4 2 4 3 4
8 1 2 2 2 1 2 1 2 2 1 3
9
10
11
12 1 5
13 4 5
Contribution 1 66 207 50 111 52 134 145 207 275 118 178 150 30 277 277 426
from 2 92 131 61 75 76 86 185 131 175 75 157 287 35 182 153 315
segment: (1000's)
Profit (1000's) 25 100 17 40 27 77 120 100 155 44 97 141 6 164 153 315
Budget (1000's) 133 238 94 146 101 143 210 238 295 149 238 296 59 295 277 426

1. The term amin was assumed to be zero. For the
kitchen segment (1), amax, the asymptotic probability
was assumed to be slightly higher when reason-why
advertising was used (0.16) than with image advertising
(0.14). For the nonkitchen segment (2), amax was
assumed to be much larger for image advertising (0.18)
than reason-why advertising (0.12). More than average
repetition was assumed to be needed for the image
advertising to the nonkitchen segment (X = 0.60) and
less than average repetition was assumed to be needed
for reason-why advertising directed to the kitchen
segment (X = 0.50).
The basic w, terms used were $7.00 for the kitchen
segment and $5.00 for the nonkitchen segment. The
assumption was that the kitchen segment will buy
a better quality and more complete set of dishes.
Table 2 reports the results of 11 runs. In several
of the runs, the results for both copy alternatives
are presented. For the first run, Copy 2 provides
greater profit and thus would be selected. The source
of the Copy 2 profit is mainly Segment 1 because
of the repetition function parameters that reflect the
belief that reason-why advertising (c = 2) will be most
effective with the kitchen segment (s = 1). The vehicle
source effect term favored Glamour (vehicle 4) for
the image copy but gave it a low rating when reason-
why copy was used. Thus, Glamour did not appear
with the reason-why copy although four insertions
were scheduled with the image copy.
In Run 2, the vc.values are replaced by their average
values (Data Set B in Table 1). As a result, Cosmopoli-
tan, which had below-average v . values, does better.
Note that the budget and profit levels are lower than
in Run 1 due to the reduced v . values for Good
Housekeeping and Ladies Home CJournal.In Run 3,
the hc. terms were replaced by their average value
(Data ?et D in Table 1). The half-page options clearly
benefitted. However, the reduced advertisement read-
ership for Good Housekeeping, Ladies Home Journal,
and McCall's (Vehicles 5, 7, and 8, respectively)
caused the profit to decline from Run 1.
In Run 4, the hcjterms for the image copy (c = 1)
was increased 50% to reflect a possible hypothesis
that simpler, less wordy copy will have greater expo-
sure. The result was the only run in which Copy 1
generated larger profit than Copy 2.
Runs 5 and 6 showed the sensitivity of the budget
to levels of X. In the remaining runs, the ws terms
were altered, showing the sensitivity of the budget
to the values of ws used. Run 11, with ws values

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ADMOD: AN ADVERTISINGDECISIONMODEL
of 10 and 8, generated a budget of more than $400,000.
The average cost for the runs on a CDC6400 was
$6.00. Run 11 cost $16.00.
CONCLUSIONS
The benefit of a model of this type is usually not
in the machinery it makes available but, rather, in
the vocabulary it creates, the structure it provides,
and its suggestions for future research. Hopefully,
ADMOD will contribute by providing structure and
identifying productive research areas. However, the
model should not be regarded as a tool of the future
that is impractical given today's state of the art. It
is true that measurement problems exist, particularly
with respect to the determination of repetition func-
tions. But even in this difficult area, the work of
Ray and his colleagues and others have provided
practical methodologies and microtheories to guide
researchers.
The fact is that enormous progress has been made
during the past decade in mathematical models, in
computer programs, and in measurement. Further,
model users are becoming more sophisticated and
interdependent. It is time to consider more compre-
hensive decision models as viable, practical aids to
decision making.
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1973),593-603.
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