Using a decision support optimisation software tool to maximise returns from an overall marketing budget: A case study from a B-to-C marketing company

Abstract

Most marketers go through an annual budget-setting round in which they allocate sums of money to a number of different marketing activities. This process is usually undertaken using historic experience of results, combined with last year's budget, to arrive at a decision about how the money should be distributed. The authors have used a new approach to solving the budget-allocation problem, using a decision support system that they have developed using integer linear programme techniques. This article is a case study of one application of this technology in the B-to-C field; it describes the problems that were encountered in getting the right metrics to go into the system, and the ways in which these were overcome. It goes on to show how the optimised outputs differed from business as usual, and the types of scenario outcome that resulted.