Budget allocation revisited

David Merrick and Karl Weaver

Karl Weaver, Data2Decisions Ltd, and David Merrick, Business Economics Ltd, look at two recent articles on how to determine the communications budget, and argue that combining the two approaches – response-curve budgeting (based on econometrics) and a scoring system (based on judgements and benchmarks) - may produce the most effective solution.

Budget Allocation Revisited

David Merrick Business Economics LimitedKarl Weaver Data2Decisions Limited

In recent years numerous articles have been written about new methods and techniques for budget allocation. A fair proportion of these have been published in Admap, and have highlighted some sharp divisions in approach. Dyson ([1],[2]), for example, describes a mathematical process for allocating budget across a portfolio of brands based on advertising response curves, and outlines the financial benefits as well as the pitfalls.

By contrast, Harper and Bridges ([3]) argue that the response-curve-based approach to budget...

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