In one line
An ad you run today is not spent by tonight. That carryover — impact decaying gradually over days or weeks as it turns into conversions — is what adstock describes.
Why it matters
Conversions don't always happen the moment someone sees an ad. Ignoring adstock misattributes late conversions to the wrong time or channel. Marketing Mix Modeling (MMM) transforms raw spend into adstocked spend (past spend decayed and added to today's) to avoid this distortion.
Run the numbers
Take an adstock with a 0.5 decay rate. Spend $1,000 today and it carries $1,000 of effect today, $500 tomorrow, $250 the day after — halving each step.
Summed, that is $1,000 ÷ (1 − 0.5) = $2,000 of effect from one day's spend. At a 0.8 decay rate it becomes $1,000 ÷ 0.2 = $5,000. The same spend can be credited with several times the contribution depending on the decay rate alone, which is exactly why that rate has to be estimated rather than eyeballed.
In practice
- Brand awareness campaigns tend to have longer adstock (effect lingers).
- Direct-response promos tend to have shorter adstock (effect fades within days).
- Ignoring adstock and just regressing daily spend against daily revenue tends to underestimate true ad effectiveness.
Go deeper
See how adstock is used in real channel-contribution analysis in What is MMM.