Question

Your company recently gave you a budget of $100,000 to spend marketing the Flotteklocke digital pocket watch. You have two marketing plans that you are considering. Plan A. You purchase highly targeted banner ads at a $10 CPM. Given how highly targeted the ads are, you expect a CTR of 5% and a bounce rate of only 20%. In your experience, about 20% of non-bounce visits will put something in the shopping cart and about 50% of those will convert to make a purchase. Under Plan A, how many bounces do you expect the site to have as a result of the campaign?

Answer 1

Under Plan A for marketing the Flotteklocke digital pocket watch with a budget of $100,000 and a $10 CPM, 5% CTR, and 20% bounce rate, we would expect to see 100,000 bounces from the campaign.

Step-by-step explanation:

The objective is to calculate the number of bounces expected under Plan A for marketing the Flotteklocke digital pocket watch with a budget of $100,000. To find this, we first determine how many impressions the budget will yield at a $10 CPM (cost per mille, or cost per thousand impressions). The budget allows for 10 million impressions, since $100,000 divided by ($10/1000 impressions) equals 10 million impressions.

Next, we calculate the expected total number of clicks by applying the expected CTR (click-through rate) of 5%, which gives us 500,000 clicks (5% of 10 million impressions). Finally, we apply the 20% bounce rate to the total number of clicks to estimate the number of bounces. A 20% bounce rate on 500,000 clicks results in 100,000 bounces.