|Table of Contents|

[1] Zhang Yuxiang, Zhong Weijun, Mei Shue,. Combination advertising with budget constraint [J]. Journal of Southeast University (English Edition), 2019, 35 (2): 257-263. [doi:10.3969/j.issn.1003-7985.2019.02.017]

Combination advertising with budget constraint()

Journal of Southeast University (English Edition)[ISSN:1003-7985/CN:32-1325/N]

2019 2
Research Field:
Economy and Management
Publishing date:


Combination advertising with budget constraint
Zhang Yuxiang Zhong Weijun Mei Shu’e
School of Economics and Management, Southeast University, Nanjing 210096, China
combination advertising budgets allocation traditional advertising online advertising budget constraint
An appropriate advertising mode selection and allocation of advertising budgets considering advertising budget constraints are developed with the game theory and optimization model. The results show that the advertising budget and the weakening factor of the online advertising effects on the traditional advertising affect sellers’ advertising, pricing strategies and budget allocation. The effectiveness of combination advertising is a Pareto optimum relative to the traditional advertising in a certain range. The weakening effect of the online advertising on the traditional advertising has a nonlinear effect on the advertising strategy and pricing strategy. In addition, sellers choose combination advertising with different budget constraints, and there is an optimal budget allocation ratio. In certain cases, sellers can obtain an optimal advertising expenditure less than the budget constrain. When sellers adopt combination advertising with enough budget, they do not invest in traditional advertising without limit. Moreover, compared with enough budget, when sellers adopt combination advertising with budget constrain, sellers do not decrease the advertising allocation of online advertising since online advertising is more efficient.


[1] Nichols W. Advertising analytics 2.0[J]. Harvard Business Review, 2013, 91(3): 60-68.
[2] Hernández-García J M. Informative advertising, imperfect targeting and welfare[J]. Economics Letters, 1997, 55(1): 131-137. DOI:10.1016/s0165-1765(97)00057-8.
[3] Peitz M, Reisinger M. The economics of Internet media[M]// Handbook of Media Economics. Elsevier, 2015: 445-530. DOI:10.1016/b978-0-444-62721-6.00010-x.
[4] McAlister L, Srinivasan R, Jindal N, et al. Advertising effectiveness: The moderating effect of firm strategy[J].Journal of Marketing Research, 2016, 53(2): 207-224. DOI:10.1509/jmr.13.0285.
[5] Iyer G, Soberman D, Villas-Boas J M. The targeting of advertising[J]. Marketing Science, 2005, 24(3): 461-476. DOI:10.1287/mksc.1050.0117.
[6] Roy S. Strategic segmentation of a market[J].International Journal of Industrial Organization, 2000, 18(8): 1279-1290. DOI:10.1016/s0167-7187(98)00052-6.
[7] Kumar V, Gupta S. Conceptualizing the evolution and future of advertising[J].Journal of Advertising, 2016, 45(3): 302-317. DOI:10.1080/00913367.2016.1199335.
[8] Ben Elhadj-Ben Brahim N, Lahmandi-Ayed R, Laussel D. Is targeted advertising always beneficial?[J]. International Journal of Industrial Organization, 2011, 29(6): 678-689. DOI:10.1016/j.ijindorg.2011.03.002.
[9] Chen J Q, Stallaert J. An economic analysis of online advertising using behavioral targeting[J]. MIS Quarterly, 2014, 38(2): 429-449. DOI:10.25300/misq/2014/38.2.05.
[10] Boerman S C, Kruikemeier S, Zuiderveen Borgesius F J. Online behavioral advertising: A literature review and research agenda[J]. Journal of Advertising, 2017, 46(3): 363-376. DOI:10.1080/00913367.2017.1339368.
[11] Liaukonyte J, Teixeira T, Wilbur K C. Television advertising and online shopping[J]. Marketing Science, 2015, 34(3): 311-330. DOI:10.1287/mksc.2014.0899.
[12] Joo M, Wilbur K C, Zhu Y. Effects of TV advertising on keyword search[J]. International Journal of Research in Marketing, 2016, 33(3): 508-523. DOI:10.1016/j.ijresmar.2014.12.005.
[13] Hill S, Burtch G, Barto M. Television and digital advertising: second screen response and coordination with sponsored search[J]. SSRN Electronic Journal, 2016, DOI:10.2139/ssrn.2905679.
[14] Sridhar S, Germann F, Kang C, et al. Relating online, regional, and national advertising to firm value[J]. Journal of Marketing, 2016, 80(4): 39-55. DOI:10.1509/jm.14.0231.
[15] de Haan E, Wiesel T, Pauwels K. The effectiveness of different forms of online advertising for purchase conversion in a multiple-channel attribution framework[J]. International Journal of Research in Marketing, 2016, 33(3): 491-507. DOI:10.1016/j.ijresmar.2015.12.001.
[16] Dorfman R, Steiner P O. Optimal advertising and optimal quality[J]. The American Economic Review, 1954, 44(5): 826-836.
[17] Wang X F, Li P C, Hawbani A. An efficient budget allocation algorithm for multi-channel advertising[C]// The 24th International Conference on Pattern Recognition(ICPR).Beijing, China, 2018: 886-891.
[18] Wright M. A new theorem for optimizing the advertising budget[J].Journal of Advertising Research, 2009, 49(2): 164-169. DOI:10.2501/s0021849909090229.
[19] Kong D G, Fan X N, Shmakov K, et al. A combinational optimization approach for advertising budget allocation[C]//Companion of the Web Conference 2018. Lyon, France, 2018: 53-54. DOI:10.1145/3184558.3186925.
[20] Zia M, Rao R C. Search advertising: Budget allocation across search engines[EB/OL].(2017-07-07)[2018-10-11]. https://ssrn.com/abstract=2985221.


Biographies: Zhang Yuxiang(1988—), male, graduate; Zhong Weijun(corresponding author), male, doctor, professor, zhongweijun@ seu.edu.cn.
Foundation item: The National Natural Science Foundation of China(No.71371050).
Citation: Zhang Yuxiang, Zhong Weijun, Mei Shu’e.Combination advertising with budget constraint[J].Journal of Southeast University(English Edition), 2019, 35(2):257-263.DOI:10.3969/j.issn.1003-7985.2019.02.017.
Last Update: 2019-06-20