We propose a variety of models to represent the joint effect of several advertising media on the demand for a product in a homogeneous market, and discuss the associated profit maximization problems. An advertising productivity function represents the combination of several media and, together with demand and advertising cost functions, determines the features of the associated profit problem. We distinguish between additive and nonadditive advertising productivity functions, then between smooth and nonsmooth ones.The demand function may either be linear or not. We observe how different models may exhibit either synergy or interference effects. In some cases we obtain explicit optimal solutions.
Using several advertising media in a homogeneous market
SORATO, Annamaria;VISCOLANI, Bruno
2011-01-01
Abstract
We propose a variety of models to represent the joint effect of several advertising media on the demand for a product in a homogeneous market, and discuss the associated profit maximization problems. An advertising productivity function represents the combination of several media and, together with demand and advertising cost functions, determines the features of the associated profit problem. We distinguish between additive and nonadditive advertising productivity functions, then between smooth and nonsmooth ones.The demand function may either be linear or not. We observe how different models may exhibit either synergy or interference effects. In some cases we obtain explicit optimal solutions.
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