Optimal Choice of Generic Milk Advertising Expenditures by Media Outlet

Abstract

The largest portion of dairy and milk checkoff funds is spent on generic fluid milk advertising. These funds are distributed among four distinct media outlets-television, radio, print, and outdoor. Spending too little on one media outlet or too much on another constitutes a missed opportunity to garner higher returns. Using 1984-93 data, this study compares historical advertising expenditures in each media outlet to the advertising expenditure decision of an optimal control model. Results show profits would have increased if funds had been reallocated from television to radio, print, and outdoor media outlets.

Keywords

• generic fluid milk advertising
• milk
• optimal control