Question

You also explained to Grazyna the example of a company that generates $1,000 for every $500 invested in a TV campaign has a revenue per ad dollar of 2. If it generates $10,000 for every $1,000 invested in another TV campaign, then it has a revenue per ad dollar of 10. Which of Grazyna’s TV campaigns is the most effective?

Answer 1

The latter TV campaign that has a revenue per ad of $10 is the most effective as the amount that the company earns from investing in it is 5 times more than the former.

Also, the return on investment is higher from the second company which means it earns more from investing less as compared to the company mentioned at the start.

If the same $1000 is invested in the first company mentioned, the revenue generated will be $2000 while the other company gives a revenue of $10,000 for the same amount invested.