Advertising Model Case

Advertising Models

The General Flakes Company sells a brand of low-fat breakfast cereal that appeals to people of all age groups and both genders. The company advertises this cereal in a variety of 30-second television ads, and these ads can be placed in a variety of television shows. The ads in different shows vary by cost – some 30-second slots are much more expensive than others – and by the types of viewers they are likely to reach. The company has segmented the potential viewers into six mutually exclusive categories: males age 18 to 35, males age 36 to 55, males over 55, females age 18 to 35, females age 36 to 55, and females over 55. A rating service can supply data on the numbers of viewers in each of these categories who will watch a 30-second ad on any particular television show. Each such viewer is called an exposure. The company has determined the required number of exposures it wants to obtain for each group. It wants to know how many ads to place on each of several television shows to obtain these required exposures at minimum cost. The data on costs per ad, numbers of exposures per ad, and minimal required exposures are listed below, where numbers of exposures are expressed in millions, and costs are in thousands of dollars. What should the company do?

TV Show
Walking
NCIS
Boardwalk
Sports
The Real
Lifetime
CNN
Game of
Minimal

Dead

Empire
Center
World
Evening

Thrones
Required
Viewer Group

MTV
Movie

Exposures
Young Men
5
6
5
0.5
0.7
0.1
0.1
3
60
Mid-age Men
3
5
2
0.5
0.2
0.1
0.2
5
60
Senior Men
1
3
0
0.3
0
0
0.3
4
28
Young Women
6
1
4
0.1
0.9
0.6
0.1
3
60
Mid-age Women
4
1
2
0.1
0.1
1.3
0.2
5
60
Senior Women
2
1
0
0
0
0.4
0.3
4
28
Cost per Ad
140
100
80
9
13
15
8
150