Companies have trouble measuring the effectiveness of advertising. This is due primarily to the lag between exposure to an ad and the consumer response to an ad. Simply put, past ads can (and usually do) affect present and future sales. Advertising adstock is a term used to measure the memory effect of advertising carried over from start of advertising. We can then use the advertising adstock as a variable in sales response modeling, e.g. regression analysis.
Visually, the effect of advertising can be thought of as follows: