Modeling intra-seasonal heterogeneity in hourly advertising-response models: Do forecasts improve?

Abstract

We examine the situation in which hourly data are available for designing advertising response models, whereas managerial decision-making can concern hourly, daily or weekly intervals. A key notion is that models for higher frequency data require the intra-seasonal heterogeneity to be addressed, while models for lower frequency data are much simpler. We use three large, actual real-life datasets to analyze the relevance of these additional efforts for managerial interpretation and for the out-of-sample forecast accuracy at various frequencies. (C) 2016 International Institute of Forecasters. Published by Elsevier B.V. All rights reserved.