1. During the first week of a search advertising campaign, your ad was served to 10,000 people and you are paying on average $3.35 PPC. It the CTR is 1.35%, then how much did you spend in the first week?

2. Your display advertising campaign is priced at 13.12 CPM with a CTR of 0.05%. What is the total cost of 100,000 impressions?

3. You are deciding whether or not to purchase a display advertising campaign on a CPC or CPM basis. The CPC price is $1.53 and the CPM price is $5.67.

a. If the expected CTR is 0.5%, which option is less expensive?

b. If the expected CTR is 2.5%, which option is less expensive?

4. [challenge] Suppose you are the marketing manager for MyTeam.com, an online seller of jerseys for sports teams. If Philly.com offered to sell you advertising on a pay-per-conversion basis at $10 per conversion and the gross margin on sales is 30%, how big does the average order have to be to justify the cost of the advertising?