Business Economics

Marketing Spend Optimisation

To find out more contact David Merrick at Business Economics Limited on 07714 456068 or david@BizEcon.com

Overview One of the key factors to business success is

the ability to react to market developments in a

timely and constructive way and, where

appropriate, change the amount and allocation

of the marketing budget.

We have designed a general-purpose

marketing spend software tool (OptPro) that

helps businesses manage their marketing

spends quickly, easily and effectively by

optimising the allocation across products,

brands, regions and media channels, and also

over time.

The above chart, taken from a typical case study, shows

how the profit contribution from advertising spend at first

increases with the size of the budget, then reaches a

maximum and finally declines. However, spending less

than the optimum amount results in a steeper decline in

profit contribution than spending more.

What does OptPro do? OptPro helps answer a range of questions

about marketing spend allocation, including:

How much should I be spending on

which brands and in which regions?

What will be the impact on sales and

profit contribution of optimising

marketing spends?

What is the cost to the business of

placing constraints on the levels of

marketing spend?

How do I choose the media mix that

maximises the overall reach at a

specified frequency?

What is the optimum laydown for my

media activity over time?

The colours in the above chart represent different

products, regions, media or brands. The chart, again taken

from a typical case study, shows how the allocation of

spend changes with the overall budget level. For low

spend amounts, relatively few line items receive budget.

But as the overall level of spend increases, the allocation

becomes more diverse. Conversely, the chart illustrates

that implementing a budget cut by reducing spends on all

line items by the same percentage will not be optimal.

How is OptPro used? OptPro is a flexible software planning tool that

can operate in a number of different modes.

At one extreme, it will construct

response curves for you and, in this

mode, requires only basic input data

Equally it can handle the complex data

sets and response functions arising

from econometric analysis.

It can also incorporate the user’s

knowledge about how the markets and

media work.

OptPro contains a highly efficient calculation

algorithm based on an advanced mathematical

approach. As a result, it provides

instantaneous answers in almost all situations.

OptPro is quick and easy to use and highly

scalable to handle large and complex

problems for a wide variety of scenarios and

portfolios.

OptPro is licenced on a business-wide basis

and is supported by documentation and

workshops.

OptPro can be implemented on a wide variety

of platforms, including as an Excel Add-In and

within a web environment.

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