Reference no: EM133251835

Today's Marketers have it rough and tough. Customers are no longer staying in their traditional channels while going through the five stages of the buying process. In fact, they are surfing across channels with abandon trying to extract maximum value from the enterprise, its competitors and substitutes alike. They are availing the high touch channels for advice and information but purchasing at another cheaper channel, all thanks to the readily available information through social media. Earlier, a CMO had to allocate budget across traditional media and print; now, she has to allocate it across SEO, AdWords, Facebook, Mobile and other social media channels to engage the customer constantly. How can the marketing team optimize the allocation of the budget for greatest ROI? Especially, when the prescription for Marketers is "all things in moderation", it is imperative to pursue optimized budget allocations before law of diminishing returns kicks in. We find that ROI from each campaign as below: 7% from TV, 3% from Print, 15% from Mobile Advertising, 12% from SEO + Adwords, and 5% from Facebook. Per Analysis and past experience, CMO's office has come up with the following as a part of their marketing strategy. 1. Production and airing the TV advertisements cost at least $500K. 2. Print media should not account for more than 5% of the budget. 3. Minimum Ad agency costs for content creation and placement for Billboards, game place promotions, airport promotion cost $200K. 4. Mobile and SEO + AdWords together should account for at least 50% and that SEO+Adwords should be no more than 2.5 times the mobile marketing costs. 5. Mobile content and advertising cost anywhere between $300K and $900K. 6. Facebook advertising should not exceed 15 % of the marketing spend. 7. Agency costs for Facebook marketing cost at least $100K. It has been learnt that a $1 spent on each channel has customer reach as: Channel (# customers reached), TV (2), Print (0.3), Mobile (1.8), SEO+Adwords(0.9), Facebook (2). The directive is that the marketing budget should not exceed $5 million and there are about 2.5 million customers in the target market segment. deliverables 1. model formulation: 2. explanation of the formulation 3. solution and explanation.