Question

A network television ad will not reach as many as it once did. Businesses also have to decide where to advertise to reach their greatest potential, and regression is a tool that can help businesses measure the impact of spending in different advertising channels. Suppose a car dealership, for example, runs a regression analysis against ad dollars spent on television ads. Then a few months later they focus on a new advertising channel, say commute hour radio to try to get those commuters in their cars on the way to and from work. They run a regression analysis on dollars spent on radio advertising. Can anyone say how the business could compare the two regression models—one for television ads and one for radio ads? What would they look for? How could they tell which one was better?

          A network television ad will not reach as many as it once did. Businesses also have to decide where to advertise to reach their greatest potential, and regression is a tool that can help businesses measure the impact of spending in different advertising channels.

Suppose a car dealership, for example, runs a regression analysis against ad dollars spent on television ads. Then a few months later they focus on a new advertising channel, say commute hour radio to try to get those commuters in their cars on the way to and from work. They run a regression analysis on dollars spent on radio advertising.

Can anyone say how the business could compare the two regression models—one for television ads and one for radio ads? What would they look for? How could they tell which one was better?

Added by Jimmy G.

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