Food and beverage / Beer
Heineken: Allocating the marketing budget
- Company
- Heineken
- Country
- Netherlands
- Adoption stage
- In operation
- Source published
- Date basis
- The date the source was published. It can differ from the date adoption started.
- How the source was checked
- Checked a source excerpt through a search tool
The work problem
There was little basis for deciding which brand and which channel marketing money should go to. Until then HEINEKEN mostly used Market Mix Models built by outside vendors to see how marketing affected revenue and return on investment. That approach did not show the effect of past spending, consumer insight and the wider economy in the detail it does now.
Technology and data
Allocation AI is an AI assistant built to raise the effect of marketing spend across brands, channels and markets. It uses computing resources to run thousands of scenarios and turns the results into a form marketers can act on directly. It measures absolute and incremental return on investment by brand and by touchpoint. The touchpoints include television, online and in-store promotional material. After the return on investment analysis, mixed-integer linear programming picks the best allocation scenario. People make the final call. HEINEKEN said experts validate the results and adjust them with knowledge the model does not yet hold. The actual users are commercial leaders, marketers and brand managers.
Results
HEINEKEN said that in 2024 it applied Allocation AI to above-the-line and below-the-line spending for every brand. It said the tool is producing incremental gross profit in Mexico, Brazil and the Netherlands. The company added that it also has data showing operating companies that broadly follow the Allocation AI results spend the same budget more profitably.
Limits and open questions
The source gives no amount for the incremental gross profit. It also does not say how much company-wide marketing return on investment improved.
Sources
- Brewing with Artificial Intelligence (AI)theheinekencompany.com, Accessed
Compiled from public sources. These are not results from ATF Works customers.