Question
You are an employee of a newspaper and are planning a randomized experiment to demonstrate to Apple that online advertising on your newspaper's website causes
You are an employee of a newspaper and are planning a randomized experiment to demonstrate to Apple that online advertising on your newspaper's website causes people to buy iPhones. Each site visitor shown the ad campaign is exposed to $0.10 worth of advertising for iPhones -- that is, exposing a user to ads over the course of the week costs Apple $0.10 per person. You run a pretty popular newspaper, so there are 1,000,000 users available to be shown ads on your newspaper's website during the one week advertising campaign. Apple truthfully indicates that they make a profit of $100 every time they sell an iPhone and that 0.5% of visitors to your newspaper's website buy an iPhone in a given week in general, in the absence of any advertising.
Question:
By how much does the ad campaign need to increase the probability of purchase in order to be "just worth it" and a break-even ROI? Define ROI as [expected additional profit made as a result of advertising to each person - cost of advertising to each person]/cost of advertising to each person X 100 %. "Break-even" ROI would mean 0% ROI.
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