Till date, I must confess that I have never read a “marketing” paper. So, when one of my friends wanted my comments on a paper that is published in JMR, June 2014, titled “Decomposing the Impact of Advertising: Augmenting Sales with Online Search Data”, I thought I might encounter a lot of marketing jargon and might be put off. Thankfully there is lot less of it in the paper.

The paper is very interesting as it uses Google trends as a proxy for consumer pre-purchase interest. Historically most of the models that have been built have never decomposed sales data in to pre purchase component and a conversion rate component. The reason being that the data relating to pre purchase activity was tough to obtain and had all sorts of problems. Thanks to Google trends, one can get all the real time data that one wants. So, the authors of the paper use Google trends data relating to automobile purchase queries and use that as a proxy for modeling the latent state variable, “consumer interest in prepurchase information”.  The authors analyze 21 cars in 4 segments and conclude some cool things which would not have been possible with out decomposing sales in to various components.

Here is a brief note with my comments