Application of a Mathematical Model to an Advertisement Reservation Problem

Abstract

Television networks provide TV programs free of charge to the public. However, they acquire their revenue by telecasting advertisements in the midst of continuing programs or shows. A key problem faced by the TV networks in Turkey is how to accept and televise the advertisements reserved by a client on a specified advertisement break which we called “Advertisement Reservation Problem” (ARP). The problem is complicated by limited time inventory, by different rating points for different target groups, competition avoidance and the relationship between TV networks and clients. In this study we have developed a mathematical model for advertisement reservation problem and extended this model for some cases encountered in real business life. We have also discussed how these cases affect the decisions of a TV network. Mixed integer linear programming approach is proposed to solve these problems. This approach has been implemented to a case taken from one of the biggest TV networks of Turkey.