Fly Jet is an airline currently advertising through multiple media channels. The company is interested in better
Question:
Fly Jet is an airline currently advertising through multiple media channels. The company is interested in better understanding the profit its marketing efforts are generating by calculating the Return on Marketing Investment (ROMI) for each campaign. ROMI can be viewed in this setting as the ratio of new revenue generated by a given marketing campaign to the cost of the related marketing campaign. In addition, it is worth noting that in this context the increase in revenue associated with a given marketing campaign (relative to the revenue observed prior to the launch of the associated campaign) is viewed as being driven by the related marketing campaign.
Use the information provided below to calculate the ROMI for each marketing campaign. The equation for ROMI is as follows:
ROMI (of a Marketing Campaign) = New Revenue Generated from a Marketing Campaign / Marketing Campaign Cost
Revenue before each campaign: $24,000
Cost of television campaign: $6,000
Revenue after television campaign: $32,000
Cost of social media campaign: $24,000
Revenue after social media campaign: $60,000
Cost of website campaign: $10,000
Revenue after website campaign: $36,000
1. Using the spreadsheet above, enter the information provided above on the revenues and cost associated with each marketing campaign. What is the value of new revenue generated by the television marketing campaign?
(Select one)
- $28,000.00
- $36,000.00
- $18,000.00
- $12,000.00
- $8,000.00
2. What is the ROMI of the social media campaign?
(Select one)
- 1.20
- 1.33
- 1.50
- 1.23
- 1.55
3. Which marketing campaign had the lowest ROMI?
(Select one)
- Television
- Website
- Social Media
Foundations of Finance The Logic and Practice of Financial Management
ISBN: 978-0132994873
8th edition
Authors: Arthur J. Keown, John D. Martin, J. William Petty