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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 1. Media mix model - impression 2. Media Mix model - Budget E.G. 3. Media Mix model - Vertical

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) 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.

SmartInsights.com

Latest best practice advice

DISCLAIMER This spreadsheet is provided in good faith for modelling budgets and performance for digital marketing. Smart Insights (Marketing Intelligence) 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 ask questions or let me know if you believe there are formula errors, so that we can update.
Download and use this spreadsheet is subject to the usage terms defined on Smart Insights.

Thanks, Dave Chaffey (www.smartinsights.com).

Prepared by Dave Chaffey 3/31/2014

Page 1

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 budgets and performance for digital marketing. Smart Insights (Marke ting Intelligence) Limited cannot be held responsible for the consequences of any errors in, or misinterpretation of, the spreadsh eet models or for any actions taken as a result of using this spreadsheet. Please ask questions or let me know if you believe the re are formula errors, so that we can update. Download and use this spreadsheet is subject to the usage terms defined on Smart Insights. Thanks, Dave Chaffey (www.smartinsights.com).

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 budgets and performance for digital marketing. Smart Insights (Marke ting Intelligence) Limited cannot be held responsible for the consequences of any errors in, or misinterpretation of, the spreadsh eet models or for any actions taken as a result of using this spreadsheet. Please ask questions or let me know if you believe there are for mula errors, so

Intelligence) Limited cannot be held responsible for the consequences of any errors in, or misinterpretation of, the spreadsh eet models or for any actions taken as a result of using this spreadsheet. Please ask questions or let me know if you believe there are for mula errors, so that we can update. Download and use this spreadsheet is subject to the usage terms defined on Smart Insights. Thanks, Dave Chaffey (www.smartinsights.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 4.3 5.0 0.6 10,000 120,000 10,000 120,000 10% 120% 27,776,667 1,000,000 0.2% 0.7% 2,000 190,733 100.0% 100.0% 2,000 190,733 5.0 0.6 100.0% 93.8% 2,000 189,733 1.1% 100.0% 5.0 0.6 100,000 9,486,667 70,000 6,640,667 10,000 120,000 80,000 6,760,667 20,000 2,726,000 25.0% 40.3% 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
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

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 1.8 10.0 20.0 100.0 5.0 0.20 0.90 5.0 10.0 33.3 100.0 10,000 30,000 30,000 10,000 10,000 10,000 10,000 10,000 30,000 30,000 10,000 10,000 10,000 10,000 10% 30% 30% 10% 10% 10% 10% 1,000,000 7,500,000 16,666,667 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 33,333 2,000 1,000 300 100 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 2,000 150,000 33,333 2,000 1,000 300 100 5.0 0.2 0.9 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 33,333 1,000 1,000 300 100 1.1% 79.1% 17.6% 0.5% 0.5% 0.2% 0.1% 10.0 10.0 5.0 0.2 0.9 33.3 100.0 100,000 7,500,000 1,666,667 50,000 50,000 15,000 5,000 70,000 5,250,000 1,166,667 35,000 35,000 10,500 3,500 10,000 30,000 30,000 10,000 10,000 10,000 10,000 80,000 5,280,000 1,196,667 45,000 45,000 20,500 13,500 20,000 2,220,000 470,000 5,000 5,000 -5,500 -8,500 25.0% 42.0% 39.3% 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 budgets and performance for digital marketing. Smart Insights (Marke any errors in, or misinterpretation of, the spreadsheet models or for any actions taken as a result of using this spreadsheet . P that we can update. Download and use this spreadsheet is subject to the usage terms defined on Smart Insights. Thanks, Dave Chaffey (www.smartinsights.com).

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 4.3 0.6 120,000 120,000 NA 27,886,667 0.7% 190,953 100.0% 190,953 0.6 93.0% 189,953 NA 0.6 9,497,667 6,648,367 120,000 6,768,367 2,729,300 40.3%
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

mart Insights (Marketing Intelligence) Limited cannot be held responsible for the consequences of this spreadsheet. Please ask questions or let me know if you believe there are formula errors, so