Question

Topic: Advertising/PR

Another Roi ?

Posted by Anonymous on 8/23/2006 at 11:53 AM ET 75 Points
Below is an excerpt of an email I received from one of my clients:

"If our costs per month are $675 (see below), we're looking at approx. $3,500 per year for a total spend of $1.94 per person IF diapers can be donated by the manufacturer (if not, total cost will be approximately $8,000 per year for 1,800 households for a total spend of $4.40 per person). Please confirm that $187/month for 150 households is correct.

Per Month
$187 drop
$80 printing
$50 design updates
$360 diaper cost"

This client experienced a 22.6% redemption on coupons. The average dollars spent when buying diapers is $107.

What is there ROI?

Thank you for your help!

Stacey
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RESPONSES

  • Posted by MANSING on 8/23/2006 at 3:15 PM Member
    • If our costs per month are $675 ~ $677 (see below) = $675 X12 = $8100/year; total house hold = 1800 and spending will be $4.5

    • (Per Month calculation: $187 drop + $80 printing + $50 design updates + $360 diaper cost" = $677)

    • We’re looking at approx. $3,500 per year for a total spend of $1.94 per person. 3500/12 = $292/month

    • If diapers can be donated by the manufacturer (if not, total cost will be approximately $8,000 per year for 1,800 households for a total spend of $4.5 per person).

    • Please confirm that $187/month for 150 households is correct.

    • Year = 12 X 187 = $2244
    • Per person = $4.5; 150 X4.5 = $675 X 12 = 8100 per year

    so the answer is right!!!


    • ROI = initial investment – final investment / initial investment
  • Posted on 8/24/2006 at 9:16 AM Accepted
    You almost have it. It will be $43,549-COGS = x. Then you take (x/$8100)-1 for a % return on investment.

    This may not be the right calculation though if you have gained some loyal customers through this promotion that will result in repeat buys. If that is the case you might want to factor up the margin by 3 or 4 depending on how many purchases they might make in the next time period.
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