Title: Assessing the effect of advertising expenditures upon sales: a Bayesian structural time series model,
Abstract: We propose a robust implementation of the Nerlove--Arrow model using a
Bayesian structural time series model to explain the relationship between
advertising expenditures of a country-wide fast-food franchise network with its
weekly sales. Thanks to the flexibility and modularity of the model, it is well
suited to generalization to other markets or situations. Its Bayesian nature
facilitates incorporating \emph{a priori} information (the manager's views),
which can be updated with relevant data. This aspect of the model will be used
to present a strategy of budget scheduling across time and channels.