June 12th, 2009 | 
Author: Well before internet marketing, in the days when there was only advertising on the media, TV, radio and film, a great deal of effort was devoted to creating computer and mathematical models of the marketing. These were used to analyse, simulate and predict how markets operated and how they could be influenced by various factors such as the amount of money spent on advertising, the most favourable times to place advertisements and many other factors.
For an example take the marketing of a common vitamin supplement that was marketed on the idea that it would boost the immune system and protect people from colds and flu, particularly children. In order to create a model of the market into which it was sold, the sales of the product were analysed over several years. As the public were more favourable towards the product in times of poor weather and when colds and flu were prevalent, detailed analyses of these were carried out and used to determine seasonal variations in the sales of the supplement. Historical advertising data was analysed in terms of content, timing, cost and media and a complex mathematical model was created of how all this worked together. This was run on a computer and would allow the marketing people to simulate different scenarios and optimise the marketing strategy. New sales figures were analysed and the results fed back into the model in order to further improve it. This approach resulted in a much improved strategy that reduced advertising expenditure by a large percentage and also increased sales.
Paid Search Marketing (PSM) is similarly open to such an approach in order to optimise marketing strategy. Indeed various approaches to this have been considered such as pay per click amoung others. The problem is that it is an extremely complex beast with a great number of variables. In fact only black box approaches to many of the key variables are possible. This is in a large part due to the high degrees of secrecy with which the PSM service providers, namely Google, Yahoo and Microsoft, guard the quality criteria that they use to determine advertisement priority in their listings. As more information becomes available, experience is gained and modelling techniques improved, models of the kind described above will begin to become available which should certainly make PSM a more predictable way of selling.
Paid Search Marketing (PSM) is similarly open to such an approach in order to optimise marketing strategy. Indeed various approaches to this have been considered such as pay per click amoung others. The problem is that it is an extremely complex beast with a great number of variables. In fact only black box approaches to many of the key variables are possible. This is in a large part due to the high degrees of secrecy with which the PSM service providers, namely Google, Yahoo and Microsoft, guard the quality criteria that they use to determine advertisement priority in their listings.
Article Source: A Paid Search Marketing Mathematical Model?
