Plan Optimization Mechanics
Keen’s optimization engine makes investment and timing recommendations for each factor by balancing profit-maximizing logic with real-world business constraints. Here are all of the forces that influence how much to invest in each tactic, and when:
1. Tactic Effectiveness (Elasticities) & Marketing Fundamentals
Marketing ROI Curves: Each tactic has a unique response curve that models diminishing returns. The optimizer prioritizes dollars where they generate the most incremental profit. Learn more here.
Carryforward Effects: Some tactics (like TV or PR) continue to drive results beyond the current period, making them more attractive in longer-term plans. Learn more here.
Interaction Effects: The value of one tactic can depend on others (e.g., search performs better when awareness tactics are active), which can raise or lower its recommended spend.
2. Seasonality
If the model has historical patterns of high impact in specific months or weeks, the optimizer shifts investment accordingly. Learn more here.
3. Economic Efficiency
Profit ROI (All Years): The optimizer is tuned to maximize lifetime profit per dollar spent, not just top-line sales.
Operating Margin: Determines how much room there is for marketing to generate incremental profit — tighter margins lead to more conservative investment levels. Learn more here.
Tactic Cost per Activity: If the average cost of each click/impression for a tactic changes over time, the amount of consumer response that can be generated from a constant level investment will flux accordingly – thus driving the relative investment recommendation.
4. User Defined Settings
Objective Type: Whether the goal is to optimize a fixed budget, hit a revenue target, or generate the maximum long-term profit from marketing, the tactic mix and timing will shift accordingly.
Tactic Constraints: Total plan budget and individual tactic constraints (min/max or fixed amounts) directly limit how dollars can be allocated. Learn more here.
5. Environment Factors
Assumptions: Price, distribution, seasonality, and other economic conditions affect consumer responsiveness and base sales. Any anticipated changes during the plan period (e.g., price increases, retailer expansion), will drive the model to recommend investing more or less in specific windows. Learn more here.
6. Portfolio-Specific Effects
Portfolio Tactics: Tactics at the portfolio level may impact multiple segments at once, which can justify higher spend even if returns look low in isolation.
Halos: Some tactics drive incremental value in other segments or channels — the optimizer includes that impact in its decisioning.