In marketing optimisation you are constantly tasked with making the right decision based on a number of known or projected factors, with the end result along the lines of maximising return or total revenue. The process of thought which you will go through (either knowingly or not) is a ‘what-if?’ analysis – weighing up the possible courses of action, the expected outcomes and deciding on the optimal solution.
If we think about these optimization problems formally, we can categorize them as either linear or non-linear optimisation. In this article, I’ll introduce linear optimisation (or Linear Programming [LP]) and give an example of how to use the Excel Solver add-in to solve some common search marketing scenarios.
Introducing Linear Programming
LP is great because it is one of those mathematical techniques which is useful and relatively easily applied within many real-life situations and industries. A good introduction to LP is given over at shelovesmath.com [Read more…]