Case Study: Linear Programming

OPTIMIZE MESSAGING ABOUT COVID-19

The Public Health Commission in NJ needs to spread the message about washing hands and social distancing to younger residents in NJ to help reduce the spread of COVID-19 and lower the curve. To help plan the marketing strategy to spread this health advisory to millennials, the NJ Public Health Commission team hired the advertising firm of Jesser, Jeffrey, and Jacobs (JJJ). The management team requested JJJ's recommendation concerning how to distribute their budget across Facebook, Google Ads, and Internet Radio (eg. Spotify). The budget has been set at $375,000.

In a meeting with the Public Health Commission, JJJ consultants provided the following information about the potential effectiveness rating (Exposure Rating) per ad, their estimate of the number of millennials reached per ad, and the cost for each ad.

The exposure rating is a measure of the value of the ad to listeners/viewers. It is a function of such things as image, message, recall, visual and audio appeal, and so on. As expected, the more expensive Facebook advertisements has the highest exposure effectiveness rating along with the greatest potential for users to follow the recommendations.

At this point, the JJJ consultants pointed out that the data concerning exposure and reach were only applicable to the first few ads in each medium. For Facebook, JJJ stated that the exposure rating of 100 and the 4000 millennials reached per ad were reliable for the first 14 Facebook ads. After 14 ads, the benefit is expected to decline. For planning purposes, JJJ recommends reducing the exposure rating to 65 and the estimate of the number of people reached 1500 for any Facebook ads beyond 14. For Google Ads, the preceding data are reliable up to a maximum of 20 ads. Beyond 20 ads, the exposure rating declines to 20 and the number of people reached declines to 1200 per ad. Similarly, for Internet Radio, the preceding data are reliable up to a maximum of 27; the exposure rating declines to 8 and the potential number of people reached declines to 200 for additional ads.

The Public Health Commission team accepted maximizing the total exposure rating, across all media, as the objective of the public health campaign. Because the importance of the messaging, management stated that digital marketing public health campaign must reach at least 100,000 millennials. To balance the campaign and make use of all media, the Public Health Commission also adopted the following guidelines:

Use at least twice as many Google Ads advertisements as Facebook advertisements

Use no more than 20 Facebook advertisements.

The Facebook budget should be at least $160,000

The Google Ads advertising budget is restricted to a maximum of $150,000

The Internet Radio budget is to be at least $35,000

JJJ agreed to work with these guidelines and provide a recommendation as to how the $375,000 advertising budget should be allocated among the choices. Develop a linear programming model that can be used to determine the advertising budget allocation for the Commission. (HINT: you should define two variables for each media option (eg. F1 = number of Facebook advertisements with rating of 100 and 4000 new customers and F2 = number of Facebook advertisements with rating of 65 and 1500 new customers, and so on). Enter the problem into Excel and use Solver to solve for the optimal solution.

In addition to the Excel file, also an executive summary managerial report.

1. Case Synopsis (include a brief summary of the case and the business issue(s)being studied)

2. Methodology (including a discussion of what information was provided and how you used this information to analyze the problem) organize the available data and type out your full mathematical programming model including defining your decision variables.

3. Findings and Conclusions (include summary of analysis results) Based on your analysis, what is NJ's Public Health Commission's (complete) optimal marketing decision?

A schedule showing the recommended number of Facebook, Google Ads, and Internet Radio advertisements and the budget allocation for each medium. Show the total exposure rate and indicate the total number of millennials reached.

Also, address the following two questions:

a. How would the total exposure change if $25,000 MORE were available in the advertising budget?

b. After reviewing JJJ's recommendation, the Public Health Commission asked how the recommendation would change if the objective of the advertising campaign was to maximize the number of millennials reached. Develop the media schedule under this objective. Show the total exposure and indicate the total number of millennials reached. (Assume total budget available is the original $375,000.)

4. Recommendations. What other factors need to be considered in making the recommendations? Do you agree with the decisions from your quantitative analysis? Why or why not? Using both of these recommendations you made in the findings and conclusions section and your own management perspective (other issues to consider), what is your recommendation for the Public Health Commission to convince millennials to adhere to the social distancing and hand-washing recommendations? You should also do some outside research and/or base your opinion on your knowledge and/or experience with Digital Marketing and your thoughts on curbing the COVID-19 pandemic (be sure to site any outside sources used)

MEDIA Facebook Google Ads | Internet Radio Exposure Rating per Ad 100 30 15 # People Reached per Ad Cost per Ad 4000 $9,000 2000 $3,000 | 1000 $1,000