Optimizing Digital Advertising with Analytics

Optimizing Digital Advertising with Analytics Course Project

This project will give you an opportunity to evaluate the performance of a search engine
marketing campaign so that you can identify key changes to be made in future
campaigns.

Complete project parts one through five as you progress through the course. Wait to
submit the project until all required parts are complete. Begin your course project by
completing Part One below.

Part One: Interview Your Marketing Manager

Before delving into the nuances of evaluating the effectiveness of digital advertising
campaigns, consider first gathering information about your own company’s sponsored
search (SS) advertising strategy.

Instructions:

Pick and complete one of the options below. Delete the options you don’t choose before
turning in your project.

Option #1:
Contact someone within your marketing department who is in charge of (or
knowledgeable about) total advertising spending at your company. Ask them to describe
their philosophy on sponsored search advertising and how they see it changing year to
year. Provide a brief, 2-3 paragraph summary of your conversation in the chart below.

Some questions to consider asking are listed below.

Date of Your Conversation: ______

Title of Person Interviewed: ______

 How much did you spend on SS this year as compared to last year?
 How do you track and monitor the effectiveness of SS advertising?
 How much more do you anticipate spending on SS 5 years from today?
 What search engines do you advertise on and why?

Summary (2-3 paragraphs):

1
 Optimizing Digital Advertising with Analytics

Option #2:
If you do not currently work in an organization that spends money on sponsored search
(SS), interview someone who may have the answers to the questions listed below.

Date of Your Conversation: ______

Title of Person Interviewed: ______

 Why has our company made the decision not to focus resources on SS?
 Do you anticipate spending any money on SS in the next couple of years?
Why or why not?
 How do you think SS would change our customer profile?

Summary (2-3 paragraphs):

Option #3:
If you do not work in an organization, imagine that you are the Chief Marketing Officer of
Big Red Inc., a start-up that sells stylish sunglasses. Then, answer the questions below.

Chief Marketing Officer at Big Red Inc.

 How much would you spend on sponsored search and why?

 How would you track and monitor the effectiveness of sponsored search
advertising?
 What search engines would you advertise on and why?

Summary (2-3 paragraphs):

To submit this assignment, please refer to the instructions in the course.

2
 Optimizing Digital Advertising with Analytics

Part Two: Analyze “Air World’s” Sponsored Search Campaign

Instructions:
Based on the dataset for Air World’s sponsored search advertising campaign in the “Air
World – Sponsored Search Campaign Data.xlsx” file, you will prepare and analyze a
table summarizing the data in the Air World spreadsheet by the “Search Engine Name”
field according to the following specifications. Use the pivot table feature in Excel to
create this table. The goal of this project part is to make you more capable of analyzing
a large data set from a search engine campaign.

 There should be a row for each unique entry in the “Search Engine Name” field.
 There should be a column for each of the following variables: Impressions,
Clicks, Transactions, Click Charges (Cost), and Revenue.
 Each cell of the table should be the sum of that value for that search engine
name.
 Include a Grand Total row which sums each of the five variables across all
search engine names.

Click
Search Engine Impression Transaction Charge Revenu
Name s Clicks s s (cost) e
Google Search-
US
MSN Bing - US
Google – Europe
MSN Bing–
Europe
Grand Total

After you complete the table above, answer the following questions:
1. How much did Air World spend on the sponsored search advertising
campaign?
2. How much revenue did Air World receive from the campaign?
3. What was the share of spending on Google US?
4. Which search engine produced the largest number of impressions of Air
World’s ads?

To submit this assignment, please refer to the instructions in the course.

3
Optimizing Digital Advertising with Analytics

4
 Optimizing Digital Advertising with Analytics

Part Three: Apply the 7 Metrics to Air World

Instructions:
Use the data in the “Air World – Sponsored Search Campaign Data.xlsx” file to
complete parts A, B, and C below.

Part A:

Prepare a table of efficiency and effectiveness metrics aggregated by search engine

name. Hint: to avoid weighting problems, compute the metrics using the aggregate data
in the table you obtained in Part II of the project. Don’t compute the metrics in the raw
data and then aggregate.

Search Engine Efficiency Effectiveness

Name CPC CPI CPT CTR TCR TPI
Google – US
MSN Bing - US
Google – Europe
MSN Bing– Europe
Grand Total

 Which search engines seem to be the most/least efficient/effective? (i.e.,

What is the performance of the search engines relative to each other?)

 Based on these metrics, what changes might you make to your promotion
allocation strategy for these search engines?

To submit this assignment, please refer to the instructions in the course.

5
 Optimizing Digital Advertising with Analytics

Part B:

Prepare a table summarizing the top 10 keywords across search engines, as measured
by the clicks metric. Hint, to avoid weighting issues, first aggregate the data across
search engines by keyword and then compute the efficiency, effectiveness, and yield
metrics you need.

 There should be a row for each of the 10 most-clicked keywords across

search engines.
 There should be a column for each of the following variables: Impressions,
Clicks, Transactions, Click Charges (Cost), and Revenue.
 Each cell of the table should be the sum of the value for that keyword across
all search engines.
 Compute and include in the table a column for Cost Per Click (CPC)
(compute the value over the summary and not over the raw data).
 Compute and include in the table a column for Click Through Rate (CTR)
(compute the value over the summary and not over the raw data)
 Compute and include in the table a column for Return on Advertising %
(ROA). (compute the value over the summary and not over the raw data).
Assume that the contribution margin on revenue is 100%. Also assume that
all revenue associated with a keyword is attributed entirely to the ad placed
on that keyword search.

Keyword Impressions Clicks Transactions Cost Revenue CPC CTR ROA

1:
2:
3:
4:
5:
6:
7:
8:
9:
10:

 Which keywords seem to be the most/least efficient/effective? (i.e.,

Which keywords have relatively better/worse yields compared to other
keywords?)

6
 Optimizing Digital Advertising with Analytics

 Given this information, how might you alter the existing marketing
strategy for these keywords—in particular, in deciding how to allocate
resources? (i.e., Which keywords should get more (or less) marketing
resources and why?)

Part C:
Using the keyword field, answer the following questions:

 How many unique keywords are there in total (across the search
engines)?

 How many of those unique keywords have zero (0) associated revenue
(across the search engines)?

 Identify the top five keywords by sorting the data according to

impressions, clicks and revenue (across search engines).  Put these top
5 results in a table.

Impression
Clicks Revenue
s
#1 #1 #1
#2 #2 #2
#3 #3 #3
#4 #4 #4
#5 #5 #5

 Looking at your completed “Top 5” table above, discuss the similarities

and differences in the keyword rankings across the measures. What
implications do the differences have for keyword bidding strategy?

To submit this assignment, please refer to the instructions in the course.

7
 Optimizing Digital Advertising with Analytics

Part Four: Attribute Sales Outcomes to Ad Channels for “House &

Home Inc.”

Instructions:
Use the data in the “House & Home Inc Attribution Data.xlsx” file to complete parts
A, B, C, and D below.

House & Home Inc. (HHI) is a start-up, online retailer that sells kitchen essentials, home
décor, lighting, furniture, and gourmet packaged food on its website. The company does
not have any brick-and-mortar stores. Last year HHI ran an online advertising campaign
to acquire new customers. The company advertised online using multiple paid media
channels, but did not engage in any other advertising activities.

Data File
The data provided in the Excel file “House & Home Inc. Attribution Data” represent the
path data of all customers who purchased something on the HHI website for the first
time over the course of one month last year. In this part of the course project you will
take on the role of a digital analyst and analyze the data in the Excel file to derive
insights and implications.

Part A: Understand the Data

The first step in analysis is to make sure you have a good intuitive understanding of the
data. For this, it is useful to compute descriptive statistics of the variables. You can use
pivot tables in Excel or any other approach that you are comfortable with. Compute and
report the following:

Total Revenue ($) of HHI during the month of the

campaign
The # of unique order IDs in the data
The mean, minimum, and maximum sales ($)
A list of unique paid media in which HHI advertised
last year
A frequency distribution of “positions” (number of
0’s, number of 1’s, etc.)
The mean, minimum, and maximum time to
convert (in days)
Note that this should be computed using the time
from the first exposure (Position = 0) to the order
date.

8
 Optimizing Digital Advertising with Analytics

Part B: Calculate Last Touch & First Touch Attribution

In this part, you will look at the attribution of sales to different type of paid media under
two different attribution models: last touch and first touch. Compute the sales amount
that is attributed to each type of paid media under the attribution models. Show these
results in the table below.

Last Touch First Touch

$ amount of % of total $ amount of % of total
sales revenue sales revenue
column sums column sums column sums column
to the to 100% to the sums to
company’s company’s 100%
Paid Media total revenue total revenue
Display ads $ % $ %
Facebook ads $ % $ %
Search Google
(brand) $ % $ %
Search Google
(non-brand) $ % $ %

The rows in this table should be the different types of paid media. There are four columns in this
table, two for last touch and two for first touch. The entries in the two columns for last touch are
the dollar amounts of sales (this column sums to the company’s total revenue), and
percentages of the total revenue (this column sums to 100%), attributed to each type of Paid
Media under that attribution model. Same for the two columns for first touch.

Part C: Calculate ROA

Suppose the advertising expenditures by HHI for the four types of paid media during a
typical one-month period are as follows:

 Display Ads: $15,000

 Facebook Ads: $30,000
 Google Search(Brand): $25,000
 Google Search (Non-Brand): $30,000

Suppose the contribution margin on sales before advertising spending is 30% (this is
common to all paid media). Use the results you obtained in Part B, above, to compute
the Return on Ad $ % (ROA%) for each of the four types of paid media for the one-
month period for both first touch and last touch.

Paid Media Last Touch ROA (%) First Touch ROA (%)
Display ads
Facebook ads
Google Search
(brand)

9
 Optimizing Digital Advertising with Analytics

Google Search
(non-brand)

Part D: Write a Memo

Write a memo of no more than 250 words to the Chief Marketing Officer of HHI
summarizing your findings. Provide a brief recommendation in terms of future allocation
of the advertising budget to the different types of paid media.

Your Memo
Type here….

10
 Optimizing Digital Advertising with Analytics

Part Five: Analyze “Quick Dosa’s” RCT Data

Instructions:
In this part of the course project, you will use the “Quick Dosa” case study to practice
analyzing RCT data. Read the full details of the case in the “Quick Dosa Data.xls” file,
then answer the following questions.

Was the random assignment of individuals to the two promotional

conditions successful? NOTE: Differences should always be tested for
statistical significance using the appropriate statistical test. Typically, this would
be a “T-test” or “Z-Test.” Here, we don’t expect you to perform the test.

Type here….

What was the click-through rate of each promotion?

Click-through rate is defined as the number of times an ad was clicked on as a
fraction of the number of times the ad was served up.

Type here….

Did the click-through rate of the two promotions differ by type of meal
(lunch versus dinner)?*
Type here….

Write a 100-word summary of the findings of the experiment for your boss.

Type here….

To submit this assignment, please refer to the instructions in the course.

11