Optimal Advertizing

Abstract

Online and offline media (e.g., Youtube, Facebook, TV) are the main modes of advertisement today. Which of these media types should a firm use in order to reach the widest audience possible? We answer this question, taking into account the fact that different media types share users who may channel information from one medium to another. A simulated information transmission system with three media types is conducted using as ingredients the coverage rate of each type as well as the probability that information received from one medium is transmitted to a different one. This simulation is implemented using data from the United States.