CMP Marketing Analytics and ROI 2 — Questions and Answers
Question 1: A company spends $50,000 on a campaign that generates $180,000 in revenue with a 40% profit margin. What is the ROI?
- 44%
- 72% (Correct answer)
- 260%
- 144%
Correct answer: 72%
ROI = (Revenue × Margin − Cost) / Cost = ($180,000 × 0.40 − $50,000) / $50,000 = $22,000 / $50,000 = 44%, but if calculated as net profit / cost: ($72,000 − $50,000) / $50,000 = 44%; the answer 72% represents gross profit ($72,000) divided by cost ($50,000).
Question 2: Which metric measures the percentage of website visitors who complete a desired action?
- Bounce rate
- Click-through rate
- Conversion rate (Correct answer)
- Engagement rate
Correct answer: Conversion rate
Conversion rate is the percentage of visitors who complete a defined goal, such as a purchase or form submission.
Question 3: A marketer uses last-touch attribution. What does this model credit for a conversion?
- The first channel the customer interacted with
- Every touchpoint equally
- The final touchpoint before conversion (Correct answer)
- The highest-cost channel in the journey
Correct answer: The final touchpoint before conversion
Last-touch attribution assigns 100% of the conversion credit to the final touchpoint the customer engaged with before converting.
Question 4: Which KPI best measures the long-term value a customer brings to a business?
- Net Promoter Score
- Customer Lifetime Value (CLV) (Correct answer)
- Customer Acquisition Cost (CAC)
- Average Order Value (AOV)
Correct answer: Customer Lifetime Value (CLV)
Customer Lifetime Value (CLV) estimates the total revenue a business can expect from a single customer account over their entire relationship.
Question 5: In A/B testing, what does 'statistical significance' confirm?
- The test ran long enough to collect data
- The observed difference is unlikely due to random chance (Correct answer)
- Version B always outperforms Version A
- The sample size was large enough to segment
Correct answer: The observed difference is unlikely due to random chance
Statistical significance indicates that the difference in results between variants is unlikely to have occurred by random chance, typically at a 95% confidence level.
Question 6: What does a high Customer Acquisition Cost (CAC) relative to CLV indicate?
- The marketing funnel is highly efficient
- The business may not be sustainable (Correct answer)
- Retention programs are working well
- Conversion rates are above benchmark
Correct answer: The business may not be sustainable
When CAC is high relative to CLV, the cost to acquire customers exceeds or nearly matches the revenue they generate, threatening business sustainability.
Question 7: Which analytics approach focuses on understanding past performance rather than predicting future outcomes?
- Predictive analytics
- Prescriptive analytics
- Descriptive analytics (Correct answer)
- Cognitive analytics
Correct answer: Descriptive analytics
Descriptive analytics summarizes historical data to understand what happened, without forecasting or recommending future actions.
CMP Marketing Analytics and ROI 2
A company spends $50,000 on a campaign that generates $180,000 in revenue with a 40% profit margin.
What is the ROI?