Calculation:

The total impression post campaign by Rocket fuel = 14.5million

cost of impression (CPM) = $9
Total cost of impression = $1,30,500 (14500000*9/1000)
Total Conversions = 15000
Cost per conversion = total cost of impression/total conversions
= 130500/15000 = $8.7

Selling price of Handbag (Marginal Revenue) = $100

Marginal cost = $60
Converting user worth = $40
Cost per conversion = $8.7
ROI after campaign = $40-$8.7 = $31.3

Previous ROI = Converting user worth – Cost per conversion

= $40 - $15 = $25

1. How much more money did TaskaBella make by running the campaign (excluding
advertising costs)?

Ans) Post the campaign TaskaBella has earned an incremental revenue of $6.3

2. What was the cost of the campaign?

Ans)

The total impression post campaign by Rocket fuel = 14.5million

cost of impression (CPM) = $9

Total cost of impression = $1,30,500 (14500000*9/1000)

3. Calculate the ROI of the campaign. Was the campaign profitable?

Ans)

The total impression post campaign by Rocket fuel = 14.5million

cost of impression (CPM) = $9

Total cost of impression = $1,30,500 (14500000*9/1000)

Total Conversions = 15000

Cost per conversion = total cost of impression/total conversions

= 130500/15000 = $8.7

Selling price of Handbag (Marginal Revenue) = $100

Marginal cost = $60

Converting user worth = $40

Cost per conversion = $8.7

ROI after campaign = $40-$8.7 = $31.3

Previous ROI = Converting user worth – Cost per conversion

= $40 - $15 = $25

Incremental ROI – 31.3 – 25 = $6.3

4. What was the opportunity cost of including a control group; how much more could
have TaskaBella made with a smaller control group or not having a control group at
all?

Ans)

Exposed Group

Impression = 1.40 million

Considering CPM as $9, Total cost of impression = $1,26,000

Total Conversion = 14420, Cost per conversions = 126000/14420 = $8.73

ROI = $ 40 – 8.72 = $31.3

Closed Group

Impression = 5,82,000

Considering CPM as $9, Total cost of impression = $5,242

Total Conversion = 420, Cost per conversions = 5242/420 = $12.5

ROI = $40 – 12.5 = $27.5

The per unit loss of profit = $31.3-27.5 = $3.8

Had there been no control group the company would have earned an incremental profit of $3.8*420 =
$1600