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Imagine you are working as an online marketer for the startup company Slick & Dorty which develops mobile games. To advertise for your newly
Imagine you are working as an online marketer for the startup company "Slick & Dorty" which develops mobile games. To advertise for your newly released mobile game "Slick & Dorty Strike Back," you plan to run advertising on "Concord" (a gaming-focused social media platform). The platform offers advertisers to run banner ads in the form of standard, interstitial, and/or contextually targeted advertising. "Concord" users typically show lower psychological reactance against obtrusive advertising than average social media users. In addition, "Concord" offers a discount on combining different advertising types. To prepare for your decision, you conducted a field experiment regarding the effectiveness of the different types of digital banner advertising. The results below demonstrate how each advertising type increases a customer's intention to purchase the "Slick & Dorty Strike Back" mobile game. The list also includes the CPM (including discount) for each advertising type demanded by the Concord social platform. " Standard banner advertising: 0.49 % (CPM: 0.75$) Interstitial banner advertising: 0.99% (CPM: 2.00$) Contextually targeted banner advertising: 1.09% (CPM: 1.75$) Combining interstitial and contextually-targeted banner advertising: -0.83% (CPM: 2.25$) Please answer the following questions. a) Calculate the cost-per-order (CPO; i.e., the investment needed for increasing a Concord site visitor's purchase probability to "very likely to purchase") for each advertising type. b) Which digital advertising type do you recommend for "Slick and Dorty"? c) Please critically discuss an explanation for the observed effects and CPOS using between 2-4 sentences. You must show all steps of your calculations for all CPOs (Excel file preferred).
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