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Mathematical marketing: a piece of calculus to change the way you advertise

mackgrenfell.com

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Re: Mathematical marketing: a piece of calculus to change the way you advertise

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post #16
post #15

Earlier quoted context omitted.

Is it common for the cost per conversion curve to be a parabola?

Are you referring to the first graph in the post? If so, great question. I haven't looked into this much but wouldn't expect it to be parabolic - that was just an approximation to illustrate the points raised.

Yes, that graph.

Alright, makes sense. I guess a parabola is the primordial (at least, to high school teachers) example so I understand why that is what you picked.

In terms of whether a parabola makes sense for the example, it's difficult for me to say. From my personal experience I would say this could maybe be done with differential equations and something akin to an R_0. Then you would also have steady states, but the advantage would be that you can actually see how your other parameters (coefficients in the differential equations) influence the conversion rate (in my analogy R_0).

Re: Mathematical marketing: a piece of calculus to change the way you advertise

#22
post #3

Fun reading for a university class, but the real world doesn’t work this way. Optimizing for a target cpa is never a possibility because at an agency or in house marketing team your given x budget and expected to spend it. I’ve never seen someone underspend a budget and be thanked for it.

While true, this kind of analysis would still be useful for the allocation of that budget. You should still aim for maximum profit when you actually can calculate that value and dump the rest of your budget somewhere else that makes sense but is much harder to quantify (market research, brand marketing).

In any case, my experience is that "in the real world" is code for just giving in to systemic inefficiency and purposefully mismanaging your resources.

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