Multiperiod Multiproduct Advertising Budgeting: Stochastic Optimization Modeling

C. Beltran-Royo, L.F. Escudero and H. Zhang

Omega, 2016, vol. 59, issue PA, 26-39

Abstract: We propose a stochastic optimization model for the Multiperiod Multiproduct Advertising Budgeting problem, so that the expected profit of the advertising investment is maximized. The proposed model is a convex optimization problem that can readily be solved by plain use of standard optimization software. It has been tested in a case study derived from a real advertising campaign. In the case study, the expected profit of the stochastic approach has been favorably compared with the expected profit of the deterministic approach. This provides a quantitative argument in favor of the stochastic approach for managerial decision making in a data-driven framework.

Keywords: Marketing; Advertising budgeting; Advertising adstock; Stochastic optimization; Convex optimization (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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DOI: 10.1016/j.omega.2015.02.013

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