Rocket Fuel - Section B - Group 1 [PDF]

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TaskaBella Inc

GROUP 1 - SECTION B KRUTHIK REDDY – 19PGP076MITHUN CHANDAR -19PGP082NARENDRAKATTA – 19PGP090SINDHUJA REDDY – 19PGP110

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Q.1 Was the advertising campaign effective?

Did the additional consumers convert as a result of the ad campaign?

Users

Not Exposed to Ads

Exposed to Ads

23104

550154

573258

420

14423

14843

23524

564577

588101

Not Converted Converted Grand Total

User Condition

Grand Total

Conversion Rate

Exposed to Ad

2.55%

Not Exposed to Ad

1.79%

Increase in converted users: 2.55% - 1.79% = 0.76% increase in converted users with the ad

Q.2. Was the campaign profitable?

2.A How much more money did TaskaBella make by running the campaign (excluding the advertising cost)? It is given in the case that each converted customer is worth $40. Total no of exposed users = 564,577 (from CSV) % conversion rate of exposed group= 2.55% (from Q.1) % conversion rate of control group =1.79% (from Q.1) % increase in converted users with the ad = 2.55%-1.79%=0.76% More money did TaskaBella made by running the campaign = (worth of converted user) *(no of exposed users)*( increase in converted users with the ad) =$40*564,577*0.76% =$173,719 More money did TaskaBella made by running the campaign= $173,719

2.B What was the cost of the campaign? It is given in the case that CPM is $9. Total no of impressions= 14597182 (from CSV) Total cost of advertising = $9 * 14597182 / 1000 = $1,31,374.38 2.C Calculate the ROI of the campaign. Was the campaign profitable? Total cost of advertising = $1,31,374.64 Profit generated from each sale = $40 No. of conversions required to breakeven the advertising cost = $1,31,374.64 / $40 = 3284.366 ~ 3285 conversions to be made Total no. of conversions made = 14843 Hence, as the actual number of conversions made were more than the breakeven, the campaign was profitable. Rocket Fuel has shown that there is an addition of 0.76% in the conversion rate due to the advertising campaign (From Q1). Current 2.55% conversion rate corresponds to 14843 conversions and a profit of $4,62,345.36 Estimated Total Users = 588101 Additional Conversions created due to the ad campaign = 588101*0.76% = 4470 Additional Profit obtained due to the additional conversions = ($4,62,345.36/2.55%) *0.76% = $137797.05 As the additional profit obtained because of running the ad campaign exceeds the total advertising cost, the campaign is profitable. ROI of the campaign = (Net Profit/Cost of investment) *100 = ($1,37,797.05 - $1,31,374.64)/ $1,31,374.64 * 100 = 4.89% 2.D What was the opportunity cost of including a control group; how much more could have TaskaBella made with a smaller control group or not having a control group at all?

Users

Exposed to Ads

Not Exposed to Ads

Total

Converted

14,423

420

14,843

Not Converted

550,154

23,104

573,258

Total

564,577

23,524

588,101

Conversion rate in the exposed group = (14423/564577) *100 = 2.55% Conversion rate in controlled group = (420/23524) *100 = 1.79% Due to the inclusion of a controlled group, TaskaBella Inc is losing out on 2.55% - 1.79% = 0.76% of the conversions which can be considered as the opportunity cost. No. of conversions lost = 0.76% of 23524 = 179 conversions lost Total Opportunity Cost of having a control group = 179*40 = $7160 However, if there is no control group, then TaskaBella will not have any reference data on how many customers will buy the new handbag without digital ads. Results of the control group will also serve as a measure of the effectivity of TaskaBella’s current digital marketing efforts.

Q3. How did the number of impressions seen by each user influence the effectiveness of advertising?

3.A Create a chart of conversion rates as a function of the number of ads displayed to the users. Plot conversion rates for those who were in the control group and for those who were exposed to the ad. Group together number of impressions as necessary to obtain a meaningful plot. (Conversion rate means the percentage of unique users who made a purchase) The impressions are grouped in the range of 100. For each range, the total number of Ad impressions for the exposed group, the number of converted users, and the conversion rates is tabulated

A graph is plotted with the conversion rate against the number of impressions for the focused group.

Conversion Rate of Exposed Group 1.20 1.00

Conversion Rate

0.80 0.60 0.40 0.20 0.00

0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 10 20 30 40 50 60 70 80 90 00 10 20 30 40 50 70 80 10 1- 01- 01- 01- 01- 01- 01- 01- 01- 1-1 1-1 1-1 1-1 1-1 1-1 1-1 1-1 1-2 1 2 3 4 5 6 7 8 90 00 10 20 30 40 60 70 00 1 1 1 1 1 1 1 2

Impression Range

The impressions are grouped in the range of 100. For each range, the total number of Ad impressions for the control group, the number of converted users and the conversion rate is tabulated

A graph is plotted with the obtained conversion rate against the number of impressions for the control group

Conversion Rate

Conversion Rate of Contol Group 0.20 0.18 0.16 0.14 0.12 0.10 0.08 0.06 0.04 0.02 0.00

1-100 101- 201- 301- 401- 501- 601- 701- 801- 901200 300 400 500 600 700 800 900 1000

Impression Range

3.B What can you infer from the charts? In what region is advertising most effective? 

For the exposed group, the conversion rate is directly proportional to the number of impressions i.e the conversion rate increases as the number of impressions increases.



On average, for the control group also the conversion rate increases as the number of impressions increases. Exposure to more than 600 impressions doesn’t have any impact of conversions and the conversion rate becomes zero.



For those exposed to ads, the most effective number of impressions is between 1701 to 1800 impressions per user



The optimal for those in the control group is between 201-300 impressions.

3.C What do the above figures imply for the design of the next campaign assuming that consumer response would be similar? 

An increase in the number of ad impressions gives a positive result as the conversion rate is 100%. But for the control group, the number of impressions should not exceed a limit as it will not lead to any conversions.

Q.4 How does consumer response to advertising vary on different days of the week and at different times of the day?

4.A Create a chart with the conversion rates for the control group and the exposed group as a function of the day of the week when they were shown the most impressions. The total number of unique users who viewed the ads on a day of the week is mentioned in the table below. The table contains data of both the exposed group, and the control group.

Total Impressions Mo n

Tue

Exposed Group

83571

74572

Control Group

3502

2907

Wed

Thu

7741 8 3490

79077 3905

Fri 8880 5 3803

Sat

Sun

78802

82332

2858

3059

The total number of converted users on the day of the week is mentioned in the table below. The table contains data of both the exposed group and the control group. Conversions

Exposed Group Control Group

Mo n 277 8 79

Tue

Wed

2270

1963

42

55

Thu 171 1 78

Fri

Sat

Sun

1995

1679

2027

62

40

63

The conversion rate is calculated for both the exposed group, and the control group. Conversion rate means the percentage of unique users who made a purchase, which is indicated as percentage below.

Exposed Group Control Group

Mon 3.32 4 2.25 6

Tue 3.04 4 1.44 5

Conversion rates (in %) Wed Thu 2.53 2.16 6 4 1.57 1.99 6 7

Fri 2.24 6 1.63 0

Sat 2.13 1 1.40 0

The obtained data of conversion rates is plotted in bar graphs separately for both the exposed group and the control group.

Sun 2.46 2 2.05 9

Exposed Group % Conversion Rate

3.500% 3.324% 3.000% 2.500% 2.000% 1.500% 1.000% 0.500% 0.000% 1

3.044% 2.536%

2

2.164%

2.246%

2.131%

4

5

6

3

2.462%

7

Day of the week

Control Group 2.500%

2.256%

% Conversion Rate

2.059%

1.997%

2.000% 1.445%

1.500%

1.630%

1.576%

1.400%

1.000% 0.500% 0.000%

1

2

3

4

5

6

7

4.B Create the same chart for hours within a day (excluding the period between midnight and 8 am). The total number of unique users who viewed the ads in an hour of the day is mentioned in the table below. The table contains data of both the exposed group and the control group. The total number of converted users in an hour of the day is mentioned in the table below. The table contains data of both the exposed group and the control group.

Exposed Group Control Group

8 16968 659

9 29802 1202

10 37454 1485

11 44149 2061

12 45238 2060

13 45485 2170

Impressions 14 15 43779 42855 1869 1828

16 35963 1604

17 33605 1383

18 31052 1271

19 29169 1183

20 27846 1077

21 28895 1081

22 25515 917

23 19547 619

20 843 19

21 843 23

22 675 15

23 449 8

The conversion rate is calculated for both the exposed group, and the control group.

Exposed Group Control Group

8 337 7

9 582 13

10 818 20

11 992 30

12 1092 35

13 1140 36

Conversions 14 15 1251 1279 30 46

16 1111 45

17 959 28

18 853 32

19 782 29

The obtained data of conversion rates is plotted in bar graphs separately for both the exposed group and the control group.

Conversion rates 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 Exposed Group 1.986% 1.953% 2.184% 2.247% 2.414% 2.506% 2.858% 2.984% 3.089% 2.854% 2.747% 2.681% 3.027% 2.917% 2.646% 2.297% Control Group 1.062% 1.082% 1.347% 1.456% 1.699% 1.659% 1.605% 2.516% 2.805% 2.025% 2.518% 2.451% 1.764% 2.128% 1.636% 1.292%

Exposed Group 3.500%

%Conversion Rate

3.000%

2.858% 2.414%

2.500% 2.000%

2.984%

3.089%

3.027% 2.854%

2.917%

2.747% 2.681%

2.646%

2.506%

2.297%

2.184% 2.247% 1.986% 1.953%

1.500% 1.000% 0.500% 0.000%

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

Hour of the day

Control Group 3.000%

2.805% 2.516%

%Coversion Rate

2.500%

2.518% 2.451% 2.128%

2.025%

2.000%

1.764%

1.699% 1.659% 1.605%

1.500%

1.347%

1.636%

1.456% 1.292%

1.062% 1.082%

1.000% 0.500% 0.000%

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

Hour of the day

4.C What days/ hours is advertising most / least effective? From the data mentioned in 4(a) and 4(b):

 

Most effective day

Least effective day

Exposed Group

Monday

Saturday

Control Group

Monday

Saturday

16

 

Most effective hour

Least effective hour

Exposed Group

16

9

Control Group

16

8