Article ID: | iaor19991117 |
Country: | Netherlands |
Volume: | 95 |
Issue: | 3 |
Start Page Number: | 511 |
End Page Number: | 521 |
Publication Date: | Dec 1996 |
Journal: | European Journal of Operational Research |
Authors: | Rust Roland T., Danaher Peter J. |
Keywords: | media planning |
In this paper we adopt the point of view that advertising is an investment, and propose a simple formula for calculating the level of media spending which maximizes the return on investment. The information which must be supplied for the calculation is commonly available, and we express the optimal expenditure level in terms which are meaningful to media planners. We show that when maximizing return on investment not all of the allocated media budget should be spent.