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Introduction to E-marketing spreadsheet models developed by Dr Dave Chaffey I have developed these spreadsheets to help marketers plan their returns from digital marketing campaigns by developing more specific goals. I hope you find them useful. If You have any comments or suggestions please contact me at the sites below. Smart Insights www.twitter.com/davechaffey Dave's company site offering best practice articles, consultancy and training Dave uses Twitter for sharing tips and tools across of all digital marketing (esp analytics, search, email marketing and conversion optimisation) A simple model at the level of whole site showing conversion of audiences into leads and outcomes. Includes profitability. Similar to first model, this enables top-level comparison of referrals between online and offline channels. Defines conversion model for distinct digital media channels based on number of impressions serves and costs/responsiveness of media. Doesn't include profitability Defines conversion model for distinct digital media channels based on a % budget split between channels and costs/responsiveness of media. Doesn't include profitability Defines conversion model for distinct digital media channels based on a % budget split between channels and costs/responsiveness of media. Also include profitability, so typically best for using as starting point in assignments where margin and revenue per sale (average order value) given. A simple model for email campaigns for modelling worst and best case campaign response based on intermediate response stages including delivery, open, clickthrough, form response and final conversion from lead to sale. Designed for site owners to help them forecast revenue based on pages served with different types of ad units including affiliate (CPA), impresssion-based (CPM) or cost-per-click units on each page (assumes same across site) A simple way of assessing potential improvements to site returns for an e-commerce site across the customer lifecycle

1.Web marketing model 2.Multichannel marketing model 3.Media mix model - impression 4.Media Mix model - Budget E.G. 5.Media Mix model - Vertical

6. E-mail objective setting

7. Ad revenue model

8. Incremental profitability model

Digital Marketing benchmarking

A separate spreadsheet for assessing the digital marketing capabilities of an organisation as part of strategy development.

DISCLAIMER This spreadsheet is provided in good faith for modelling budgets and performance for E-marketing. Smart Insights (Marketing Inteligence) Limited cannot be held responsible for the consequences of any errors in, or misinterpretation of, the spreadsheet models or for any actions taken as a result of using this spreadsheet. Please notify me of formula errors, so that I can update. Thanks, Dave

Prepared by Dave Chaffey 4/28/2012

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72466122.xls.ms_office

Spreadsheet created by Internet marketing author and commentator Dave Chaffey of Smart Insights Sign up for the latest alerts on digital marketing best practice at:

www.smartinsights.com

Prepared by Dave Chaffey 4/28/2012

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E-commerce investment appraisal model

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1.Web marketing model

Model

Web marketing model - A simplifed version of the Objective setting spreadsheet, but without the 'What if' models See Chapter 4 of Dave Chaffey's Total E-mail Marketing for more details on customer acquisition using the web and e-mail E-mail campaign spreadsheet designed by Dave Chaffey of Marketing Insights ( www.marketing-insights.co.uk) Scenario 1 Scenario 2 1,000,000 250,000 REACH of web site
Attraction effciency Web site VISITORS 20.00% 200,000 10.00% 20,000 60.00% 12,000 1.0 1.0 50 0.30 60,000 15.0% 510,000 570,000 2,000 10,000 5,000 17,000 587,000 600,000 13,000 2.2% 50.00 5.00 5.00% 12,500 5.00% 625 C Lead conversion efficiency 40.00% 250 1.0 1.0 30 2.00 25,000 20.0% 6,000 31,000 2,000 20,000 10,000 32,000 63,000 7,500 -55,500 -88.1% 30.00 100.00

Web marketing efficiency characteristics

Site conversion efficiency

LEADS generated

Number of required OUTCOMES

Offline sales multiplier Repeat customer multiplier Average value per outcome

Variable costs Fixed costs

Cost of acquisition per visitor (Average Cost per click, CPC) Total visitor acquisition cost Gross profit margin Total cost of goods sold Total variable costs Other brand and marketing costs Site development/maintenance costs Other operational costs Total fixed costs Total costs Total revenue Profitability Return on Investment Revenue per customer Cost of customer acquisition (CPA)

E-commerce performance measures

Blue cells = input variables - vary these for 'what-if' analysis Orange cells = output variables (calculated - do not overtype)
How to use this spreadsheet 1. Use for objective setting - vary reach and different types of efficiency using goal seeking to calculate required number of outcomes (key objective). 2. Use for what-if scenarios for different assumptions about efficiency - the example shows 2 different scenarios from best case to worst case. Sensitivity analysis of different variables can also be conducted. Need to perform for different media and produc ts! 3. Use to evaluate proposals from different providers - check all cost components are present and compare quotes for each column. 4. Use post-launch to compare actual budget with estimated.

Notes. A. Position mouse over cell to read the comment for cells with red triangles. B. This model is based on a single year only. A model integrated over several years is needed for detailed investment appraisal. C. This calculation does not allow for viral effects or reminders which may increase number of respondents - can increase CTR to allow for this. D. If negative amounts for nSent, CTR or completion are suggested the campaign is unrealistic in terms of input varaibles e.g cost . sent, value per outcome. DISCLAIMER This spreadsheet is provided in good faith for modelling e-commerce investments. Smart Insights (Marketing Inteligence) Limited cannot be held responsible for the consequences of any errors in, or misinterpretation of, the spreadsheet models or for any actions taken as a result of using this spreadsheet. Please notify me of formula errors, so that I can update. Thanks.

Marketing Insights Limited 2002 www.marketing-insights.co.uk <Improving performance through marketing intelligence>

E-commerce investment appraisal model

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REACH of Channel

2.Multichannel marketing model

Totals E-channel 1,000,000 Response efficiency

RESPONDENTS from Channel

Traditional channels 1,000,000 10.0% 110,000 20.0% Offline leads 10.00% 1,110 0.50% 135 Offline sales 27,000 40.0% 11,910 70 5 50 550,000 10.0% 750,330 1,300,330 20,000 100,000 40,000 160,000 1,460,330 833,700 -626,630 -42.9% 70.00 46.18

2,000,000

Drive to traditional Drive to E-channel 5.0% 1.00% 5.00% 10,000 50,000 100,000 Unique visitors Offline inbound enquiries 10.0% 11,100 Online leads 20.0% 2,355 Online sales 50 2 5 200,000 10.0% 105,975 305,975 10,000 80,000 20,000 110,000 415,975 117,750 -298,225 -71.7% 50.00 84.93 5.00% 5,000 1.00% 1,100

210,000

Web marketing efficiency characteristics

Conversion to lead efficiency

LEADS generated from Channel

38,100

Conversion to sale efficiency

OUTCOMES from Channel

14,265

Average value per outcome Cost of acquisition per respondent Cost of sale per customer Total visitor acquisition cost Gross profit margin Total cost of goods sold Total variable costs Other brand and marketing costs Site development/maintenance costs Other operational costs Total fixed costs Total costs Total revenue Profitability Return on Investment Revenue per customer Cost of customer acquisition (CPA)

Variable Fixed costs costs

E-commerce performance measures

Blue cells = input variables - vary these for 'what-if' analysis Orange cells = output variables (calculated - do not overtype)
How to use this spreadsheet 1. Use for objective setting - vary reach and different types of efficiency using goal seeking to calculate required number of o utcomes (key objective). 2. Use for what-if scenarios for different assumptions about efficiency - the example shows 2 different scenarios from best case to worst case. Sensitivity analysis of different variables can also be conducted. 3. Use to evaluate proposals from different providers - check all cost components are present and compare quotes for each column . 4. Use post-launch to compare actual budget with estimated.

Notes. A. Position mouse over cell to read the comment for cells with red triangles. B. This model is based on a single year only. A model integrated over several years is needed for detailed investment apprais al. C. This calculation does not allow for viral effects or reminders which may increase number of respondents - can increase CTR to allow for this. D. If negative amounts for nSent, CTR or completion are suggested the campaign is unrealistic in terms of input varaibles e.g . cost sent, value per outcome. DISCLAIMER This spreadsheet is provided in good faith for modelling e -commerce investments. Smart Insights (Marketing Inteligence) Limited cannot be held responsible for the consequences of any errors in, or misinterpretation of, the spreadsheet models or for any actions taken as a result of using this spreadsheet.

Marketing Insights Limited 2002 www.marketing-insights.co.uk <Improving performance through marketing intelligence>

Home

Online Media Mix model - impression based

Setup/ creative /Mgt costs External online media Online ads (CPM) Paid search (CPC) Natural search (Fixed) Affiliates (CPS) Aggregators (CPS) Sponsorships (Fixed) E-mail lists (CPM) Total/Average 20,000 5,000 30,000 20,000 20,000 10,000 5,000 110,000 CPM
Media costs CPC Media costs

Total cost

Media volume/response Conversion to Opportunity Budg Impressions CTR Clicks or CRO nOpportu CPO et % or names visits nities

CRS

Conversion to Sale nSales % of sales

CPS (CPA)

10.0 30.5 3.0 4.9 6.1 32.5 80.0 15.6

6.25 2.00 0.30 0.82 0.76 6.50 8.41 1.94

80,000 300,000 0 19,200 28,800 250,000 32,000 710,000

100,000 305,000 30,000 39,200 48,800 260,000 37,000 820,000

12% 37% 4% 5% 6% 32% 5% 100%

8,000,000 10,000,000 10,000,000 8,000,000 8,000,000 8,000,000 400,000 52,400,000

0.2% 16,000 1.5% 150,000 1.0% 100,000 0.6% 48,000 0.8% 64,000 0.5% 40,000 1.1% 4,400 0.8% 422,400

5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0% 5.0%

800 7,500 5,000 2,400 3,200 2,000 220 21,120

125.00 40.67 6.00 16.33 15.25 130.00 168.18 38.83

10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0%

80 750 500 240 320 200 22 2,112

4% 1,250.0 36% 406.7 24% 60.0 11% 80.0 15% 90.0 9% 1,300.0 1% 1,681.8 100% 388.3

Internal online media In-house e-mail list/DM 500 Own-site ads (other footfall) 500 Total/Average 1,000 Overall total/Average 111,000

0.1 1.0 1.8 15.4

0.17 0.08 0.09 1.85

10 1,000 1,010 711,010

510 n/a 1,500 n/a 2,010 n/a 822,010 n/a

100,000 3.0% 1,000,000 2.0% 1,100,000 2.1%

3,000 20,000 23,000

15.0% 10.0% 8.0% 8.6%

450 2,000 2,450 23,570

1.13 0.75 0.82 34.88

30% 25% 17.0% 18.4%

135 n/a 500 n/a 635 n/a 2,747 n/a

3.8 3.0 3.2 299.2

53,500,000 0.8% 445,400

Notes. 1. CPM and CPC calculated based on total cost for comparison 2. This is not a full ROI or lifetime value model since revnue/profitability/future value not included
Blue cells = input variables - vary these for 'what-if' analysis Orange cells = output variables (calculated - do not overtype) How to use this spreadsheet 1. First define expected conversion rates to opportunity (lead) and sale for different media (can be set to same value for si mplicity). 2. Then establish realistic costs for purchasing different media (CPM,CPA,CPC) as appropriate for your market. 3. Finally vary the mix of impressions for different media, remembering that there are limits to media that can be purchased (e.g. number of search terms). Vary the impressions to maximise number of sales and minimise CPA while also minimising the risk of purchasing too much of one type of media - a more balanced budget diversifies risk. 4. To compare the effectiveness of media look at differences in media for CPS and as % of budget and % of sales. DISCLAIMER This spreadsheet is provided in good faith for modelling e-commerce investments. Smart Insights (Marketing Inteligence) Limited cannot be held responsible for the consequences of any errors in, or misinterpretation of, the spreadsheet models or for any actions taken as a result of using this spreadsheet. Please notify me of formula errors, so that I can update. Thanks.

Home Overall budget Average order value Gross profit margin

Online Media Mix model - based on % budget - with example of 'average' clickthrough rates
100,000 50.00 30.0%
Media costs CPC Media costs Media volume/response Conversion to Opportunity Budget Impressions CTR Clicks or CRO nOpportu CPO % or names visits nities Conversion to Sale nSales % of CPS sales (CPA)

Setup/ creative /Mgt costs External online media Online ad buys (CPM) Ad network (CPC) Paid search (CPC) Natural search (Fixed) Affiliates (CPS) Aggregators (CPS) Sponsorships (Fixed) Online PR (Fixed) E-mail lists (CPM) Total/Average Internal online media In-house e-mail list/DM Own-site ads (other footfall) Total/Average

CPM

Total cost

CRS

0 10.0 5.00 0 20.0 1.00 0 4.0 0.20 0 0.5 0.05 0 10.0 1.00 0 0.0 0.00 0 100.0 33.33 0 100.0 10.00 0 10.0 1.00 0 4.7 0.35

10,000 20,000 30,000 5,000 5,000 0 10,000 10,000 10,000 100,000

10,000 20,000 30,000 5,000 5,000 0 10,000 10,000 10,000 100,000

10% 20% 30% 5% 5% 0% 10% 10% 10% 100%

1,000,000 1,000,000 7,500,000 10,000,000 500,000 0 100,000 100,000 1,000,000 21,200,000

0.2% 2,000 100.0% 2.0% 20,000 100.0% 2.0% 150,000 100.0% 1.0% 100,000 100.0% 1.0% 5,000 100.0% 1.0% 0 100.0% 0.3% 300 100.0% 1.0% 1,000 100.0% 1.0% 10,000 100.0% 1.4% 288,300 100.0%

2,000 20,000 150,000 100,000 5,000 0 300 1,000 10,000 288,300

5.00 1.00 0.20 0.05 1.00 0.00 33.33 10.00 1.00 0.35

10.0% 200 1% 10.0% 2,000 7% 10.0% 15,000 52% 10.0% 10,000 35% 10.0% 500 2% 10.0% 0 0% 10.0% 30 0% 10.0% 100 0% 10.0% 1,000 3% 10.0% 28,830 100%

50.0 10.0 2.0 0.5 10.0 20.0 333.3 100.0 10.0 3.5

1,000 1,000 2,000

0.0 0.0 1.8

0.33 0.05 0.09

0 0 0

1,000 n/a 1,000 n/a 2,000 n/a

100,000 3.0% 1,000,000 2.0% 1,100,000 2.1%

3,000 20,000 23,000

15.0% 10.0% 70.8%

450 2,000 2,450

2.22 0.50 0.82

30% 25% 15.8%

135 n/a 500 n/a 635 n/a

7.4 2.0 3.1 3.5

Overall total/Average 2,000 4.6 0.33 100,000 102,000 n/a 22,300,000 1.4% 311,300 59.2% 290,750 0.35 18.2% 29,465 n/a Notes. 1. CPM and CPC calculated based on total cost for comparison 2. This is not a full ROI or lifetime value model since revenue/profitability/future value not included 3. For SEO, budget is automatically placed into setup/creative costs and you have to estimate the number of clicks this will deliver. 4. For affiliate marketing, work back from Cost per sale to calculate sales, opportunities and clicks, so changing clickthrough and conversion rates impacts cells to left rather than right. 5. The blue cells indicate the main control parameters for each media which are important to improving cost effectiveness
Blue cells = input variables - vary these for 'what-if' analysis
Orange cells = output variables (calculated - do not overtype)

How to use this spreadsheet 1. First define expected conversion rates to opportunity (lead) and sale for different media (can be set to same value for si mplicity). 2. Then establish realistic costs for purchasing different media (CPM,CPA,CPC) as appropriate for your market. 3. Finally vary the mix of impressions for different media, remembering that there are limits to media that can be purchased (e.g. number of search terms). Vary the impressions to maximise number of sales and minimise CPA while also minimising the risk of purchasing too much of one type of media - a more balanced budget diversifies risk. 4. To compare the effectiveness of media look at differences in media for CPS and as % of budget and % of sales. DISCLAIMER This spreadsheet is provided in good faith for modelling e -commerce investments. Smart Insights (Marketing Inteligence) Limited cannot be held responsible for the consequences of any errors in, or misinterpretation of, the spreadsheet models or for any actions taken as a result of using this spreadsheet. Please notify me of formula errors, so that I can update. Thanks.

be held responsible for the consequences of any errors in, or misinterpretation of, the spreadsheet models or for any actions taken as a result of using this spreadsheet. Please notify me of formula errors, so that I can update. Thanks.

Source: Dave Chaffey (www.davechaffey.com)

Costs

Revenue Total revenue

Cost of goods sold

Costs Media costs

Total costs (inc media)

Profit

Profitability Return on Investment

10,000.00 100,000.00 750,000.00 500,000.00 25,000.00 0.00 1,500.00 5,000.00 50,000.00 1,441,500.00

7,000 10,000 70,000 20,000 525,000 30,000 350,000 5,000 17,500 5,000 0 0 1,050 10,000 3,500 10,000 35,000 10,000 1,009,050 100,000

17,000 90,000 555,000 355,000 22,500 0 11,050 13,500 45,000 1,109,050

6,750.00 25,000.00 31,750.00 1,473,250.00

4,725 17,500 22,225

1,000 1,000 2,000

5,725 18,500 24,225 1,133,275

1,031,275 102,000

-7,000.00 10,000.00 195,000.00 145,000.00 2,500.00 0.00 -9,550.00 -8,500.00 5,000.00 332,450.00 0.00 0.00 1,025.00 6,500.00 7,525.00 0.00 339,975.00

-41.2% 11.1% 35.1% 40.8% 11.1% #DIV/0! -86.4% -63.0% 11.1% 30.0% #DIV/0! #DIV/0! 17.9% 35.1% 31.1% #DIV/0! 30.0%

Home Input parameter table Overall budget Average order value Gross profit margin

Online Media Mix model - based on % budget - with example of 'average' clickthrough rates
100,000 50 30.0%
Blue cells = input variables - vary these for 'what-if' analysis

Orange cells = output variables (calculated - do not overtype) Search Partners

Advertising

Ad buys (CPM) Setup/ creative / Mgt costs CPM CPC Media costs Total cost:setup & media Budget % Impressions or names CTR Clicks or site visits Conversion rate to opportunity Number of opportunities Cost per opportunity Conversion rate to sale Number of sales % of sales Cost per sale (CPA) Total revenue Cost of goods sold Media costs Total costs (inc media) Profit Return on Investment

Media costs

Media impressions & Response Conversion to Opportunity (Lead) Conversion to Sales Revenue Costs Profitability

0 0 10.0 2.8 5.0 0.5 10,000 100,000 10,000 100,000 10% 100% 36,110,000 1,000,000 0.2% 0.6% 2,000 207,400 100.0% 100.0% 2,000 207,400 5.0 0.5 100.0% 93.8% 2,000 206,400 1.0% 100.0% 5.0 0.5 100,000 10,320,000 70,000 7,224,000 10,000 100,000 80,000 7,324,000 20,000 2,996,000 25.0% 40.9% Note: 1. CPM and CPC calculated based on total cost for comparison 2. This is not a full ROI or lifetime value model since future lifetime value not included 3. For SEO, budget is automatically placed into setup/creative costs and you have to estimate the number of clicks this will deliver. 4. For affiliate marketing, work back from Cost per sale to calculate sales, opportunities and clicks, so changing clickthrough and conversion rates impact 5. The blue cells indicate the main control parameters for each media which are important to improving cost effectiveness Source: Dave Chaffey (www.davechaffey.com)
How to use this spreadsheet 1. First define expected conversion rates to opportunity (lead) and sale for different media (can be set to same value for simpl 2. Then establish realistic costs for purchasing different media (CPM,CPA,CPC) as appropriate for your market. 3. Finally vary the mix of impressions for different media, remembering that there are limits to media that can be purchased (e. sales and minimise CPA while also minimising the risk of purchasing too much of one type of media - a more balanced budget diversifies risk. 4. To compare the effectiveness of media look at differences in media for CPS and as % of budget and % of sales. DISCLAIMER This spreadsheet is provided in good faith for modelling e-commerce investments. Smart Insights (Marketing Inteligence) Limited

Ad network Paid Natural Affiliates Aggregators Sponsorship Email list (CPM) search search (CPA) (CPA) (Fixed) (CPM) (CPC) 0 0 0 0 0 0 0 10.0 10.0 4.0 0.4 10.0 20.0 100.0 5.0 0.20 0.20 5.0 10.0 33.3 100.0 10,000 30,000 10,000 10,000 10,000 10,000 10,000 10,000 30,000 10,000 10,000 10,000 10,000 10,000 10% 30% 10% 10% 10% 10% 10% 1,000,000 7,500,000 25,000,000 1,000,000 500,000 100,000 10,000 0.2% 2.0% 0.2% 0.2% 0.2% 0.3% 1.0% 2,000 150,000 50,000 2,000 1,000 300 100 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 2,000 150,000 50,000 2,000 1,000 300 100 5.0 0.2 0.2 5.0 10.0 33.3 100.0 100.0% 100.0% 100.0% 50.0% 100.0% 100.0% 100.0% 2,000 150,000 50,000 1,000 1,000 300 100 1.0% 72.7% 24.2% 0.5% 0.5% 0.1% 0.0% 10.0 10.0 5.0 0.2 0.2 33.3 100.0 100,000 7,500,000 2,500,000 50,000 50,000 15,000 5,000 70,000 5,250,000 1,750,000 35,000 35,000 10,500 3,500 10,000 30,000 10,000 10,000 10,000 10,000 10,000 80,000 5,280,000 1,760,000 45,000 45,000 20,500 13,500 20,000 2,220,000 740,000 5,000 5,000 -5,500 -8,500 25.0% 42.0% 42.0% 11.1% 11.1% -26.8% -63.0%

All digital media channels Total or Average

DISCLAIMER This spreadsheet is provided in good faith for modelling e-commerce investments. Smart Insights (Marketing Inteligence) Limited misinterpretation of, the spreadsheet models or for any actions taken as a result of using this spreadsheet. Please notify me

Costs

Internal

Full total

House list

Site promo banners 0 0.0 0.0 0 0 N/A

Total

External and internal 0 0.0 0.0 0 0 0 2.8 0.5 100,000 100,000 NA 36,220,000 0.6% 207,620 100.0% 207,620 0.5 93.0% 206,620 NA 0.5 10,331,000 7,231,700 100,000 7,331,700 2,999,300 40.9%
Conversion to Sale Revenue Costs Profitability

0 0.0 0.0 0 0 N/A 10,000 0.2% 20 100.0% 20 0.0 100.0% 20 NA 0.0 1,000 700 0 700 300 42.9% NA

N/A 100,000 0.2% 200 100.0% 200 0.0 100.0% 200 NA 0.0 10,000 7,000 0 7,000 3,000 42.9% 0.0 11,000 7,700 0 7,700 3,300 42.9% 110,000 0.2% 220 100.0% 220 0.0 100.0% 220

of clicks this will deliver. nging clickthrough and conversion rates impacts cells to left rather than right.

ame value for si mplicity).

an be purchased (e.g. number of search terms). Vary the impressions to maximise number of

ing Inteligence) Limited cannot be held responsible for the consequences of any errors in, or

ing Inteligence) Limited cannot be held responsible for the consequences of any errors in, or . Please notify me of formula errors, so that I can update. Thanks.

E-mail Campaign calculator created to support E-marketing training workshops 6. E-mail objective setting from CIM and Dave Chaffey's Total E-mail Marketing book
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Objective setting worksheet - use to assess Return on Investment for different campaigns. See Chapter 3 of Dave Chaffey's Total E-mail Marketing for more details on E-marketing campaign planning E-mail campaign spreadsheet designed by Dave Chaffey of Marketing Insights (www.marketing-insights.co.uk)
Best case Worst case Campaign 3

Model

Number of e-mails SENT from list

10,000 90.0% 9,000 Open Rate (%) 30.00% 2,700 10.0% 270 20.0% 54 25.0% 14 10.00 150 0.050 0.800 1,500 500 43 500 800 250 3,593 135 -3,458 -96.2% 13.31 66.54 2.50

10,000 80.0% 8,000 20.00% 1,600 8.0% 128 10.0% 13 22.5% 3 10.00 150 0.050 0.800 1,500 500 10 500 800 250 3,560 29 -3,531 -99.2% 27.81 278.14 2.25

10,000 100.0% 10,000 100.00% 10,000 100.0% 10,000 100.0% 10,000 100.0% 10,000 10.00 150 0.050 0.800 1,500 500 8,000 500 800 250 11,550 100,000 88,450 765.8% 1.16 1.16 10.00

Deliverability (%)
Number E-mails DELIVERED

E-mail campaign response details

Number E-mail OPENED

Clickthrough rate % (CTR)

Number recipients who CLICKTHROUGH to landing page

Form completion %
Number of completed RESPONSES

Outcome conversion %
Number of required OUTCOMES

Average value per outcome List rental (per thousand) Cost per e-mail sent Fulfillment cost per response e.g.offers and response management Total list cost Total sending cost Total fulfillment cost E-mail creative Landing page / microsite creative Set-up cost for sending list and/or fixed fulfillment costs Total cost Total revenue Profitability Return on Investment Cost per click (CPC) Cost per response (CPA) Revenue per response

Variable costs Fixed costs

Campaign success measures

Blue cells = input variables - vary these for 'what-if' Orange cells = output variables (calculated - do not How to use this spreadsheet 1. Use for objective setting - vary 'number sent', CTR and completion rate to achieve the required number or responses or target profitability. 2. Use for what-if scenarios for different response rates - the example shown shows 3 different scenarios from best case to worst case. 3. Use to evaluate proposals from different providers - check all cost components are present and compare quotes for each column. 4. Use post campaign to compare campaign success across different campaigns.

Notes. A. Position mouse over cell to read the comment for cells with red triangles. B. This sheet uses a simplification of all measures. Click on response details tab at bottom for more detailed stages of campaign. Margin is not built into this model. C. This calculation does not allow for viral effects or reminders which may increase number of respondents - can increase CTR to allow for this. D. If negative amounts for nSent, CTR or completion are suggested the campaign is unrealistic in terms of input varaibles DISCLAIMER This spreadsheet is provided in good faith for modelling e-mail campaigns. Smart Insights (Marketing Inteligence) Limited cannot be held responsible for the consequences of any errors in, or misinterpretation of, the spreadsheet models or for any actions taken as a result of using this spreadsheet. Please notify me of formula errors, so that I can update. Thanks.

Marketing Insights Limited 2002-2003 www.marketing-insights.co.uk >>Improving performance through marketing intelligence>>

7. Ad revenue model

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Ad revenue worksheet - for site owners (especially publishers, portals and affiliates) to assess potential ad revenue for site based on number of page views and different types of ads in different containers. Assumes same number of ad units run of site, but a version could be created readily for each site section.
Ad Unit or Container type Measure Pages served CPM (Cost Per Thousand) % Inventory served Avg. Clickthrough (CTR %) Ad units served per page Clicks - CPM ads Revenue - display ads Earnings per 100 clicks (EPC) eCPM - display ads % Inventory served Avg. Clickthrough (CTR %) Ad units served 1 Clicks - fixed Revenue - fixed sponsorship* Earnings per 100 clicks (EPC) eCPM - fixed % Inventory served Avg. Clickthrough (CTR %) Avg. Cost Per Click Ad units served per page Clicks - CPC ads Revenue - CPC ads Earnings per 100 clicks (EPC) eCPM - CPC ads % Inventory served Avg. Clickthrough (CTR %) Ad units served per page Clicks - Affiliates Desination conversion rate (%) Average order value Commission % Revenue - affiliates Earnings per 100 clicks (EPC) eCPM - affiliates Clicks - total Revenue - total Earnings per 100 clicks (EPC) - total eCPM - total Site 1,000,000 10 20% 0.10% 2 400 4,000 1,000.0 4.00 100% 0.30% 1 3,000 3,000 100.0 3.00 100% 1.00% 0.30 1 10,000 3,000 30.0 3 100% 0.50% 1 5,000 3% 100 10% 1,500 30.0 1.50 18,400 11,500 62.50 11.50

Display advertising (CPM)

Fixed Run-of-site Sponsorship

Text ad advertising (CPC)

Affiliates Commission (and PPV)

Overall metrics for site

Blue cells = input variables - vary these for 'what-if' analysis Orange cells = output variables (calculated - do not overtype) DISCLAIMER This spreadsheet is provided in good faith for modelling e-commerce investments. Smart Insights (Marketing Inteligence) Limited cannot be held responsible for the

Ad revenue model
Some guidelines on applying this model, which is available on the other worksheet: 1. This model asssumes there are the same ad unit types throughout the site - additional columns could be created for different page types or site sections. 2. Use the % inventory to roughly adjust the presence of the ad units throughout the site (set to 100% if run-of-site) or if all the inventory can't be sold in a given time period. 3. Set ad units of each type on the page. Bear in mind that position of individual placements will drastically affect CTR. So for a more accurate model, additional rows could be created for ad units above the fold or within article copy, which will have a higher CTR. 4. I have set the CTRs to a typical average for different media, although beware since these are averages. 5. Earnings per thousand pages served (eCPM) should be reviewed to compare value generated by pages for different ad units / media deals.

72466122.xls.ms_office

4/28/2012

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Incremental profiltability model - gives a simple way of assessing potential returns when investing in new promotion methods, new functionality, or conversion optimisation across the whole customer lifecycle. Use for top -

Acquisition

Conversion

Sales value

Returns

Channel profitability

Performance measure Worst case Best case Current unique visitors to site or section per year 1,000,000 1,000,000 Potential incremental visitors 1.00% 2.00% Cost of increasing visitors (Year 1) 4,000 20,000 Potential incremental visits 10,000 20,000 Potential future visits total 1,010,000 1,020,000 Current conversion rate 2.00% 2.00% Incremental conversion rate change 20.00% 5.00% Cost of improving conversion (Year 1) 20,000 20,000 New conversion rate 2.40% 2.10% Current sales 20,000 20,000 Potential incremental leads or sales (from conversion) 4,000 1,000 Potential future sales total (from visits and conversion) 24,240 21,420 Current average order value 50 50 Potential incremental average order value 10.00% 0.00% Cost of improving AOV (Year 1) 10,000 10,000 New AOV 55.00 50.00 Current revenue 1,000,000 1,000,000 Potential incremental revenue (from AOV) 100,000 0 Potential future revenue total (from visits, conv and AOV) 1,333,200 1,071,000 Current returns rate 10.00% 10.00% Potential incremental returns change 5.00% 3.00% Cost of improving returns rate 5,000 5,000 New returns rate 9.50% 9.70% Current revenue (with returns) 900,000 900,000 Potential incremental revenue (with reduced returns) 905,000 903,000 Potential future revenue total (with all improvements above) 1,206,546 967,113 Margin 15% 15% Current site profit 135,000 135,000 Future site profit 180,982 145,067 Change in profit (%) 34% 7% Incremental profit 45,982 10,067 Total initiative costs 39,000 55,000 Return on investment 18% -82%

A high-level model for assessing potential increases in return from enhancing different parts of the sales cycle, for an e-commerce site.