The original problem is defined here: http://goo.

gl/6WtVDK

ROI on each campaign is:

9% on TV
14% on SEO
10% on Adwords
5% on Facebook.
The total budget is $10M.
Search Engine Marketing (SEO + Adwords) is the primary focus and the allocation must exceed 6
total spend.
Social media campaign on Facebook should cost no more than 20% of the spend.
Production and airing of a TV ad will cost a minimum of $200,000.
Minimal contract with a social agency for Facebook advertising is $80,000.
An SEO content creation agency needs between $600K and $2.2M
The marketing strategy says that Adwords cost should be no more 3 times the SEO costs.

Channels have varying reach. It has been estimated using the number of customers you can reach
spending $1 in each channel:
TV 2.5 customers-per-dollar
SEO 2.1 customers-per-dollar
Adwords 0.9 customers-per-dollar
Facebook 3.0 customers-per-dollar

The number of customers in the market base is estimated to be around 14 million people. You shou
allocate spend to match that number with campaign reach.
the allocation must exceed 60% of the

f the spend.

0,000.

mes the SEO costs.

of customers you can reach by

d 14 million people. You should

 Allocation of Marketing $s to Various Channels Under Constraints (Linear Optim

ROI Note:
These are monthly absolute
Campaign percentages and are NOT based
on CLV calculation

TV 16.00%
SEO 35.00%
Adwords 20.00%
Facebook 16.00%

Objective Function
Maximize ROI (in 1000's) $0.00

Constraints (all numbers in

thousands)

Budget Constraints
Total Budget 0 <=
SEO + Adwords > 60% of Total 0 >=
Facebook < 20% of Total 0 <=

Contracts and costs

TV Ad > 200K 0 >=
Facebook (min contract)> 80K 0 >=
SEO Agency > 600K 0 >=
SEO Agency < 2200 K 0 <=
Adwords costs < 3* SEO costs 0 <=

Customer Reach

Total # of customers 1300K 0 <=

us Channels Under Constraints (Linear Optimization)

Number of Customers
Channels acquired/dollar

TV 2.5
SEO 2.1
Adwords 0.9
Facebook 3

Solution
Dollar Allocation (in
Channel 1000's)
TV
SEO
Adwords
Facebook

10000
0
0

200
80
600
2200
0

14000