Blue Nile is currently in position 2 for an engagement ring search query. Overall click-through rate (clicks
Question:
Blue Nile is currently in position 2 for an engagement ring search query. Overall click-through rate (clicks per impression) of the search query (for paid/sponsored links) is 2.3% and position 2 gets 23% of the clicks. Blue Nile is paying $1.95 per clicks, Blue Nile can get to position 1 by paying $2.45 and can improve click share to 57%. In position 3 you would pay $1.10 but your click share would drop to 12%. Conversion rate (order per click) is 5% in all 4 positions. Blue Nile's gross profit per order is $65. The campaign objective is to maximize Net profit (Gross profit - Spend). CPC for position 4 is $0.45
1) What is the click through rate (CTR) and cost per order in position 2?
2) What is the click through rate and cost per order in position 4?
3) What is the click through rate and cost per order in position 1?
4) Which of the 4 positions do you want to be in?
5) At what CTR in position 2 are you indifferent between positions 1 and 2, assuming all incremental clicks are equally shifting from position 3 and 4, i.e. oveall CTR for search result is not changing?
Please show all your analysis, and specify any assumptions you make.
Business Law The Ethical Global and E-Commerce Environment
ISBN: 978-0071317658
15th edition
Authors: Jane Mallor, James Barnes, Thomas Bowers, Arlen Langvardt