PromoLab Ltd . is a small marketing analytics consultancy that works with co...
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PromoLab Ltd. is a small marketing analytics consultancy that works with consumer brands in Aotearoa New Zealand. One of their clients is , a fast-growing sparkling water company. Frizzle ran a month-long experiment to test whether advertising had a greater effect on sales during the holiday season compared to regular weeks. The company tracked weekly advertising budgets (in $1,000s) and corresponding sales revenue (in $1,000s) over 50 different store-weeks. They flagged each week as either a holiday (1) or non-holiday (0) period. To estimate the impact, PromoLab estimated the following regression model :
Sales = β₀ + β₁ × AdBudget + β₂ × Holiday + β₃ × (AdBudget × Holiday) + ε
where: Sales = total weekly sales revenue (in $1,000s); AdBudget = weekly advertising budget (in $1,000s); Holiday = dummy variable: 1 if holiday week, 0 otherwise and AdBudget × Holiday = interaction variables of advertising budget and holiday dummy
The regression result is presented in the accompany Excel output below.
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