Are you an experienced digital marketer? If so, you must face the scenario based interview questions in your interviews. Here, I am trying to answer the scenario based questions that may be asked in interviews. My goal is very simple, by reading my post you will know the answer to the below question and also, you will get knowledge to face that kind of question in your interviews.
I need one help from you all. If you faced any scenario based questions in your interviews please share them in the comment section.
Interview Question :
The rate for the CPM campaign type is $8 and $0.8 for the CPC campaign type.
Impressions to be bought is 1,000,000. Now suppose the CTR is 5%. In this situation, which campaign type will be beneficial for the advertiser?
Answer: As per this scenario CPM type is beneficial for the advertiser.
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Explanation :
Advertisers spend money on digital advertising to improve their business revenue. So, lower ad spending will always be beneficial to advertisers.
To find the beneficial campaign type for the advertiser, we need to calculate the total cost for each campaign type.
From the given question we get below information,
Total Impression = 1,000,000
CPM = $8
CPC = 0.8
CTR = 5%
Cost Calculation For CPM Type Campaign :
Total Impression = 1,000,000
CPM =$8
We can calculate the total cost by the simple formula Cost = Total Impressions/1000*CPM Rate
Total Cost = 1000000/1000*8
Total Cost = $8000
Cost Calculation For CPC Type Campaign :
To calculate the cost for the CPC type campaign, we need to find the total clicks. Here, we have the total impressions and CTR details. From these two values, we can easily calculate the total clicks.
Total Clicks = Total Impressions * CTR
Total Clicks = 1,000,000 * 5%
Total Clicks = 50000
The given CPC is $0.8. So, we can calculate the total cost below,
Total Cost = Total Clicks * CPC
Tota Cost = 50000 * 0.8
Total Cost = $40000
Which campaign type is beneficial?
We have calculated the total cost for each campaign type,
Total Cost For CPM Type Campaign: $8000
Total Cost For CPC Type Campaign: $40000
The total cost for a CPM type campaign is low compared with the total cost for a CPC type campaign. As per the given scenario, the CPM campaign type will be more beneficial for the advertiser.
The numbers in the scenario may differ. So, before answering this question please do the above calculation. Based on the result decide the beneficial campaign type for the advertiser.
Let’s consider, the CTR in the above scenario is 0.3% the entire answer will differ.
Total Clicks = Total Impression * CTR
Total Clicks = 1,000,000 * 0.3%
Total Clicks = 3000
Total Cost = Total Clicks * CPC
Total Cost = 3000*0.8
Total Cost = $2400
Total Cost For CPM Type Campaign: $8000
Total Cost For CPC Type Campaign: $2400
In this scenario, the CPC campaign type will be more beneficial to the advertiser.
I hope this post helped you to understand and answer the above scenario based digital advertising question. If yes, please comment with your thoughts. Also, mention if you have any scenario based questions.
