Case #2 - Online Store Marketing

The following table shows the activity on a Canadian online store's webpage resulting from their social media campaign last year. The cost of the social media advertising campaign last year was $70,000 generating $230,780 in revenue.

The business would like to increase their social media campaign budget for this year. Their projected metrics with the increased budget are shown on the right of the table below.

Marketing Activity	Last Year (LY) Metrics	This Year (TY) Projected Metrics
Times Ad is displayed	750 000	997 000
Ad Clicks	32 000	45 000
Explore the Website	10 980	14 000
Complete a Form		1 200
Make a Purchase	340	680

Calculation Type	Last Year	This Year (Projected)
Click Through Rate (CTR)
Bounce Rate
Cost Per Click (CPC)
Cost Per Lead (CPL)
Cost Per Acquisition (CPA)		$130.00
Conversion Rates
leads to visitors
sales to leads
sales to visitors
Total Revenue (TR)
Return On Ad Spend (ROAS)		4:1

Analysis Questions

1. If 1 in 12 people that explored the website completed a form last year, what was the cost per lead that year?

2. Complete a table on the previous page:

Source:www.wordstream.com/blog/ws/2017/02/28/facebook-advertising-benchmarks

Benchmark Averages: CTR 1.79% CPC = $0.70

Cost per lead = $25.77 Bounce rate for social media = 50%

Conversion Rate (sales to visitors) = 3.49% Average CLV (customer lifetime value) = $600

3. What will be the projected revenue for 2020 if they would like ROAS = $4.50?

4. What is the most money that the store should spend on acquiring a new customer? (HINT: of CLV).