Cost-effectiveness analysis

subornaakter20 · Post by **subornaakter20** » Wed Jan 22, 2025 10:13 am

The communicative effectiveness of promotion is defined as the degree of impact of promotion (one or several types) on buyers. For example, the degree of attracting consumers' attention, their recognition of the brand, satisfaction with the purchase, etc. are assessed.

There is a close connection between these concepts. The difference lies in the criteria of the discussed types of efficiency. The first option is about sales volume and other quantitative data, and the second is characterized by the psychological specifics of the perception of promotion programs by clients.

In order to analyze the economic efficiency changsha mobile phone numbers database of advertising impact, basic material is used, which is provided in the form of statistical and accounting indicators of turnover. Based on this data, it is possible to conduct a study of the economic efficiency of a certain advertising medium, the entire campaign and the advertising work of the enterprise as a whole.

Source: shutterstock.com

Parameters for assessing the economic efficiency of channel operation:

Customer acquisition costs (CAC) give an idea of some nuances. Buying a customer, for example, using Yandex.Direct will cost you 5,000 rubles, and using Facebook - 3,000 rubles.

Channel capacity . Indicates the volume of customers acquired per unit of time via a specific channel. Let's say that Yandex.Direct supplies about 100 people per month, and Facebook - about ten (taking into account that they are cheaper there).

Difficulties in connecting the channel . Accounting is carried out in time costs. In particular, the launch of Facebook tools occurs within a few minutes, while Yandex requires moderation, which takes several days, and the partner network can be fully connected only in a month.

Return on investment . It is determined by the ROI coefficient and is one of the most accurate indicators, which is quite difficult to calculate.

How is ROI calculated?
The ROI (or return on investment) coefficient, expressed as a percentage, characterizes the payback. It shows how profitable or unprofitable a certain investment is. To calculate it, you need to have the income indicators from the deposit and its size. This coefficient is described by the formula:

ROI = (Income from Investment – Investment Amount) / Investment Amount * 100%

We subtract the cost of a certain advertisement from the income from sales of the product sold with the help of this advertisement and first divide the result by the amount of investment, then multiply by 100% and get the result. The ROI coefficient can also have a negative value.

Let's look at an example. A certain online store placed an advertisement for its product on AdWords, in Yandex.Direct and a local newspaper. Customers redirected from Yandex.Direct made purchases for 9,700 rubles, from AdWords - for 8,600 rubles, and newspaper readers brought 5,000 rubles to the cash register. Yandex.Direct services cost 2,780 rubles, AdWords - 2,530 rubles, and publication in the press - 4,000 rubles.