What Is Advertising Elasticity of Demand (AED)?
Advertising elasticity of demand (AED) is a measure of a market’s sensitivity to increases or decreases in advertising saturation. Advertising elasticity is a measure of an advertising campaign’s effectiveness in generating new sales. It is calculated by dividing the percentage change in the quantity demanded by the percentage change in advertising expenditures. A positive advertising elasticity indicates that an increase in advertising leads to a rise in demand for the advertised good or services.
