Question

Amanda has a yearly advertising and promotions budget of $45000. Her goal is to maximize the reach (the number of customers that see her company’s ads or other marketing efforts). She is considering a mix of placing ads on art websites and in printed art magazines, as well as using targeted social media ad placements and appearances at art tradeshows. She wants to make sure that the company has an online presence, so would like to see at least 110 ads placed on any combination of websites and social media per year. However, she has data that suggests that if she advertises on the websites more than once per week she will be wasting money. There are seven art tradeshows that the company could attend, but Amanda feels it is mandatory to attend at least the three most popular tradeshows. There are three major art magazines, each published monthly, that Amanda would like to advertise in. She could advertise in each of these once per month but would be comfortable reducing the frequency to a minimum of once every three months in each magazine and rotating the placements between the magazines.

Reach:

Art Website: 14000

Social Media: 12000

Tradeshow: 5000

Print Mag: 10000

Cost:

Art Website: 250

Social Media: 250

Tradeshow: 1000

Print Mag: 400

a. Recommend the appropriate mix of advertising and promotions for the company.

b. Also, comment on what would change if Amanda doubled her advertising and promotions budget. Estimate the increased reach.

Please answer with excel!

Answer 1

Amanda should allocate her $45,000 budget to reach 1,559,000 potential customers through a mix of website ads, social media ads, tradeshows, and print magazine ads, considering the relevant constraints. If the budget doubled, the additional funds could be used to increase social media ads and print frequency, possibly achieving a higher reach.

Step-by-step explanation:

To recommend an appropriate mix of advertising and promotions for Amanda's company, we must consider the cost and reach of each option as well as the constraints provided. Amanda has a minimum online presence requirement of 110 ads per year but cannot exceed one website ad per week. She also wants to attend at least three tradeshows and considers advertising in art magazines a maximum of once per month or as infrequent as once every three months. Given these conditions, we can calculate the optimal mix using Excel, considering the cost and reach of each option.

Scenario 1: Original $45,000 Budget

Art Website Ads (max 52 times a year): 52 ads × $250 = $13,000 for 728,000 reach.

Social Media Ads (to meet minimum online ads): (110 - 52) ads × $250 = $14,500 for 696,000 reach.

Tradeshows (at least 3 tradeshows): 3 tradeshows × $1,000 = $3,000 for 15,000 reach.

Print Magazine (once every three months for each magazine): 3 magazines × 4 times a year × $400 = $4,800 for 120,000 reach.

With this setup, we reach a total of 1,559,000 potential customers within the $45,000 budget. We meet the online presence minimum, attend the mandatory tradeshows, and have a recurring presence in print magazines.

Scenario 2: Doubled Budget to $90,000

If Amanda doubled her advertising budget to $90,000, the additional funds could be allocated to increase the number of social media ads and the frequency of magazine ads, while still respecting the maximum useful frequency of website ads and the value of attending tradeshows. This could significantly increase her reach.

For a precise answer, a similar calculation process would be repeated with the larger budget while considering the diminishing returns and saturation points for each advertising medium.