Planning the digital marketing budget: computer modelling for decision making (original) (raw)

An intelligent simulation model of online consumer behavior

Journal of Intelligent Manufacturing

This paper describes the design of an Intelligent Simulation Model of Online Consumer Behavior (ISMOCB) that incorporates a knowledge base using some form of the Artificial Intelligence methods such as Naïve Bayes Classifier and Artificial Neural Networks. This study investigates modeling online consumer behavior by using demographic characteristics such as age, gender, marital status, educational status, monthly income and number of people in the family. This will provide producing more synthetic data and creating an “Artificial Database” which includes the demographics of online consumers and their purchase transactions. The model is built for online shopping based on empirical data gathered in Turkey via an online survey. Two different inference systems are used for which product group is chosen by whom has which demographic characteristics. The quality of the data, gathered exclusively for this project, allows a fine validation of the simulation results.

Online Ad-Sales Analysis and Understanding Customer Behavior Towards Online Ads

In the 21st century, the world is completely dependent on technology. Technology is used in every domain. One such domain is the marketing and sales domain. After the Covid pandemic, the reliance on internet for convenience has increased substantially. This is where E-commerce companies and their online advertisements come into picture. The U.S. online advertising had increased from 8.1billionin2000to8.1 billion in 2000 to 8.1billionin2000to21.2 billion in 2007 and from 3.2 percent of all advertising to 8.8 percent over that time period. Considering how important online ads have become for revenue increment in different companies, it has become a domain that requires analysis. This study aims to analyse the online ad sales revenue generated by Meta and Google using the Analysis of Variance (ANOVA) method. It will also analyse how different groups of customers respond to online ads and draw a significant inference based on this.

An Empirical Model of Advertising Dynamics

Quantitative Marketing and Economics, 2005

We develop a model of dynamic advertising and apply it to the problem of optimal advertising scheduling through time. In many industries we observe advertising "pulsing", whereby firms systematically switch advertising on and off at a high-frequency. The previous literature has explained such patterns through an S-shaped sales response to advertising, and long-run effects of advertising on demand (advertising "carry-over"). We extend a discrete choice based demand system to allow for a threshold in the effect of advertising (a special form of an S-shape) and for advertising carryover. Demand without a threshold and no long-run advertising effect is a special, testable case of our proposed model. We estimate the demand system using an easy to implement partial maximum likelihood estimator. We then solve for dynamically optimal advertising under the estimated demand system. We allow for oligopolistic competition among firms, using the Markov perfect equilibrium (MPE) concept to solve for the outcome of the repeated game. An analytic solution of the model is infeasible, and we thus solve for equilibrium advertising using numerial dynamic programming techniques. The flexibility provided by the numerical solution method allows us to improve on the existing literature, which has placed strong restrictions on the demand models for which supply side policies can be obtained, and mostly considered only two competitors. We apply our model to the case of advertising in the Frozen Entree product category. The demand estimates provide evidence for a threshold effect in the sales-response to advertising as well as advertising carry-over. The threshold is robust to functional form assumptions on the impact of advertising on demand. The demand estimates imply that firms should pulse in equilibrium. On average, the optimal advertising policies yield a moderate profit improvement over the profits under observed advertising.

Simulation: An Effective Marketing Tool

2010

Simulation-the study and use of models of complex relationships-is one of the most valuable techniques in the management sciences, and has been greatly advanced in the last decade by the use of high-speed computers. Following the extensive development of simulations of military systems and the advent of high-speed computers, there has been, in recent years, a growing interest in applying simulation techniques to business problems including marketing problems. This paper presents a literature review of application of computer simulation in marketing and demonstrates the advantages of simulation as an effective marketing tool. The design of computer simulation for the industrial buying process which focuses on the buyers and their response to various marketing strategies, is described as a generalized-microanalytic-interactive-simulation. Also, the role of simulation in marketing game is discussed.

Internet Advertising and Consumer Behavior in the Purchase of Products

Kuwait chapter of Arabian Journal of Business & Management Review, 2013

Information and communications of new technologies, has created the intelligence community and emergence this community has put a particular conditions facing the audience. One of proposed fields, is commercial advertising. Commercial advertising Brokers are trying beside use of the symbols, colors combination, with emphasis on principles and practices of internet advertising to use of the latest communication and media technologies for products introduce, to attract the audience tends than a product or service. They are trying to communicate with a wider audience that, familiar with their favorite via different ways and currently are trying to advertise products with this operating. Important factor in successful marketing and advertising strategies, is an understanding of consumer behavior. Consumer behavior involves people and what they purchase, why and how to their purchase and marketing and market. The emergence of the Internet as a new media in communication and advertising realm, has prompted researchers to carry out research in this field that two commonly used strategies include awareness and entertainment strategies and each of them will be selected depending on product complexity and customer behavior. That's why is important identify customers and consumers behaviors on the Internet advertising.

How Can We Predict the Performance of Small Firms' Online Advertising? An Agent-Based Modelling & Simulation Approach

Online marketing is becoming essential for a small firm's survival and growth. Despite the ubiquity of online advertising campaigns, it is hard to predict or estimate the performance of such campaigns. The purpose of this study is to unveil the hidden processes that underlie the performance of online marketing. We do this by using agent-based modelling & simulation (ABMS) built on the Bass model of innovation diffusion. Methodologically, ABMS have a high degree of realism because they can account for heterogeneous activities and attributes of individuals. In our ABMS, we build plausible micro-level processes regarding online marketing at the individual level, which then aggregate to generate macro-level phenomenon of the innovation diffusion. We extend existing ABMS research in this area in two ways. Firstly, our model includes a scale-free network topology, and secondly, we incorporate the possibility of negative word of mouth. Our model can be used to forecast the performance of small firms' online marketing.

The Effect of Banner Advertising on Internet Purchasing

Journal of Marketing Research, 2006

The electronic business environment has given rise to new forms of advertising instruments such as banner advertising, pop-ups and search-based links. However, little research exists on the relationship between advertising exposure and actual purchasing on the Internet. In this research, we focus on a hitherto unexplored question -does banner advertising affect purchasing patterns on the Internet. In particular, using a behavioral database consisting of customer purchases at a website along with individual advertising exposure, we measure the impact of banner advertising on current customers' probabilities of buying again while accounting for duration dependence.

THE EFFECTS OF DIGITAL MEDIA BUYING ON ADVERTISERS

Management: Journal of Contemporary Management Issues, 2020

Although the Internet has become the essence of communication, from an advertiser's perspective digital advertising remains under explored. This paper examines the effects of digital media buying efforts on advertisers in Bosnia and Herzegovina, while looking into the methodology of digital media usage behind the actual effects. A combination of secondary research analysis and qualitative research techniques was used. The empirical part is based on in-depth interviews with advertisers and representatives from the digital advertising industry.Perceptions and knowledge of digital advertising are the key drivers for a successful implementation of digital media buying, and advertisers in Bosnia and Herzegovina are aware of its most distinctive qualities. The success of the media buying campaigns relies on brand objectives and choosing the means suited for fulfilling the given goals, which in turn leads to the findings that the focus of companies' strategies is directed towards the cost-efficient medium usage, rather than solely performance-oriented ones. Measurement of the effects and return on the investment depends on the success of setting up a goal and isolating digital from other marketing efforts.

The potential scope of the internet's impact on advertising strategy

Although many commentators perceive that the potential impact of the Internet on business will be large, to date evidence is not conclusive. The present paper examines the Internet's impact on advertising and outlines the potential impact the new media may herald. These include the interactive, measurable and controllable nature of advertising through on the Internet. However, although the potential appears great, present levels of advertising spend on the Internet accounts for less than 1% of all advertising. This low level of total spend on the Internet is considered to be a result of a combination of different factors including a lack of targeted sites and the problems of measurement standards. However, the potential benefits of building an advertising campaign on the medium are clear, and achievable, if advertising companies are willing to work closely with their key relationship clients.