Describes and illustrates a practical model for determining optimal levels of media expenditure (GRPs). Advertising is regarded as an investment: the formula calculates what will produce the best return on investment. The article starts by reviewing the current difficulties in justifying advertising expenditure, and various criteria used: percent of sales; matching competitors’ percent of sales; share of voice related to targeted share of market; and considers three optimal criteria (maximizing advertising profitability, productivity or ROI). Assumptions about the cost and effectiveness of GRPs, which are inputs to the model, are explained.
