Managing Blood Donations with Marketing

Blood banks rely on marketing to encourage donors to give blood. Many, if not most, blood banks in the United States are community-based not-for-profit organizations with limited marketing budgets. As a result, blood banks increasingly use novel and inexpensive online media, i.e., paid, owned, and earned (POE) media, in their marketing efforts. We propose a dynamic model to help blood bank marketing managers understand how blood donations can be managed via online POE media. We analytically characterize the optimal forward-looking paid media strategies, taking into account the asymmetric costs related to shortage and excess of blood, as well as the possibility of a cost-free target donation zone. We detail new advertising resource allocation rules for blood banks and show when traditional allocation recommendations do not apply. Additionally, we discover that under certain circumstances, owned/earned media activities hurt the blood bank’s performance, despite being (predominantly) free. We validate our analytical model by using daily donation data from a community-based blood bank and measure the effects of POE media activities on the level of blood donated.