ROI for an online marketing campaign- advice needed
- SEO |
Dear forum users,
I am management and marketing student trying to solve coursework task. I have to calculate the ROI factor for an imaginary online marketing campaign. The data I was given is as follows:
IMPRESSIONS--> 400000
CLICKS --> 4000
CTR --> 0.01
CPC --> 1.5
CPM --> 15
CPA --> 13.33
COST --> 6000
CONVERSIONS --> 450
ACTIVITY(% of active users among converted users)-->13%
AVERAGE REVENUE PER ONE USER: 55
I started off by calculating the number of actual purchases, so:
13% * CONVERSIONS= 58.5
and multiplied it by average revenue per user:
58.5 * 55 = 3217.5
The formula I used for ROI is:
ROI = Net Profit/ Cost = Profit-Cost/ Cost
to get:
ROI= (3217.5-6000/ 6000 ) *100= -46.4%
Is my reasoning correct ? I find it surprising that the ROI value turned out to be negative, especially as the following part of the task kind of suggests that it should be rather high...
I will be obliged for any tips concerning my problem...
Sarah
I am management and marketing student trying to solve coursework task. I have to calculate the ROI factor for an imaginary online marketing campaign. The data I was given is as follows:
IMPRESSIONS--> 400000
CLICKS --> 4000
CTR --> 0.01
CPC --> 1.5
CPM --> 15
CPA --> 13.33
COST --> 6000
CONVERSIONS --> 450
ACTIVITY(% of active users among converted users)-->13%
AVERAGE REVENUE PER ONE USER: 55
I started off by calculating the number of actual purchases, so:
13% * CONVERSIONS= 58.5
and multiplied it by average revenue per user:
58.5 * 55 = 3217.5
The formula I used for ROI is:
ROI = Net Profit/ Cost = Profit-Cost/ Cost
to get:
ROI= (3217.5-6000/ 6000 ) *100= -46.4%
Is my reasoning correct ? I find it surprising that the ROI value turned out to be negative, especially as the following part of the task kind of suggests that it should be rather high...
I will be obliged for any tips concerning my problem...
Sarah