1. Business Economics
Marketing Spend Optimisation
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
The colours in the above chart represent different
optimising the allocation across products, products, regions, media or brands. The chart, again taken
brands, regions and media channels, and also from a typical case study, shows how the allocation of
over time. 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
Contribution becomes more diverse. Conversely, the chart illustrates
16,000
14,000
that implementing a budget cut by reducing spends on all
12,000
line items by the same percentage will not be optimal.
10,000
8,000
6,000
How is OptPro used?
4,000 OptPro is a flexible software planning tool that
2,000
0
can operate in a number of different modes.
 At one extreme, it will construct
Spend
response curves for you and, in this
The above chart, taken from a typical case study, shows mode, requires only basic input data
how the profit contribution from advertising spend at first  Equally it can handle the complex data
increases with the size of the budget, then reaches a sets and response functions arising
maximum and finally declines. However, spending less
from econometric analysis.
than the optimum amount results in a steeper decline in
profit contribution than spending more.  It can also incorporate the user’s
knowledge about how the markets and
What does OptPro do? media work.
OptPro helps answer a range of questions
OptPro contains a highly efficient calculation
about marketing spend allocation, including:
algorithm based on an advanced mathematical
 How much should I be spending on approach. As a result, it provides
which brands and in which regions? instantaneous answers in almost all situations.
 What will be the impact on sales and
OptPro is quick and easy to use and highly
profit contribution of optimising
scalable to handle large and complex
marketing spends?
problems for a wide variety of scenarios and
 What is the cost to the business of portfolios.
placing constraints on the levels of
marketing spend? OptPro is licenced on a business-wide basis
 How do I choose the media mix that and is supported by documentation and
maximises the overall reach at a workshops.
specified frequency?
 What is the optimum laydown for my OptPro can be implemented on a wide variety
media activity over time? of platforms, including as an Excel Add-In and
within a web environment.
To find out more contact David Merrick at Business Economics Limited on 07714 456068 or
david@BizEcon.com