# META MARKETING ANALYTICS PROFESSIONAL CERTIFICATE

# Course 4: Data Analytics Methods for Marketing

## Week 4: Optimizing Your Marketing Mix

## Coursera Study Guide

Click to Enroll in Coursera Meta Marketing Analytics Professional Certificate

## CONTENT

- PRACTICE QUIZ: MARKETING MIX MODELING
- PRACTICE QUIZ: ATTRIBUTION
- PRACTICE QUIZ: SALES FUNNEL ANALYSIS
- GRADED QUIZ: OPTIMIZATION
- DATA ANALYTICS METHODS FOR MARKETING FINAL QUIZ

In the final week, you will be introduced to marketing mix modeling and different attribution models and how to use them to make marketing strategy recommendations. You’ll wrap up the week by learning how to visualize and analyze sales funnels and how to use them to recommend next steps in a marketing campaign.

## Learning Objectives

- Describe marketing mix modeling
- Make marketing recommendations based on marketing mixed models
- Define attribution modeling and its application in marketing
- Make recommendations based on the findings from an attribution study
- Describe what a sales funnel is and describe its use cases
- Understand dropoff in sales funnels and different sales funnel shapes
- Visualize a sales funnel in Tableau
- Provide recommendations for campaign next steps based on a sales funnel

## PRACTICE QUIZ: MARKETING MIX MODELING

### 1. Your manager is asking you to put a report together that shows how much incremental sales was generated by the TV campaign you ran last quarter and she also wants to know how that compares to the money that you invested in ads on Facebook during that same time. Which would be the best metric to highlight in your report:

- Cost per Acquisition
- Return on Investment (ROI)
**(CORRECT)** - Customer Lifetime Value

**Correct: That is right! The ROI will show the return on the advertising dollars invested for each channel, and it will make it easy to compare the channels and decide which one worked best for you.**

### 2. Which of the following are typical outputs of a MMM?

- An overview of which of my TV ad creatives worked best in the past year.
- Marginal return associated with each marketing channel.
**(CORRECT)** - An overview of how my spending in different marketing channels contributed to success.
**(CORRECT)** - A report that provides detail on how much influence each of your marketing activities had on sales.
**(CORRECT)**

**Correct: Correct! The Media Curves provided as output from MMM will give you insight into the marginal return associated with the different media channels. These will help you estimate the return you can expect at different spending levels.**

**Correct: Correct! MMM comes with a report on ROI that evaluates how the level of spending in different channels related to the achieved outcome in terms of sales – also referred to as the ROI report.**

**Correct: Correct! For every variable that is believed to have had an impact on past sales, a value will be provided to help you understand its level of impact on sales.**

### 3. For which of the following questions could a marketer use a Marketing Mix Model to get the answer:

- Which ad creative performed best in my holiday ad campaign on Facebook?
- What was the ROI of my fall TV campaign I ran last year?
**(CORRECT)** - What would the influence be on sales if I doubled the budget I spend on Instagram Stories next year?
**(CORRECT)** - What would happen to sales if we increase the price of our product?
**(CORRECT)**

**Correct: Correct!**

### 4. Marketing Mix Modeling is an interaction between a team of modelers and an econometric model. What is the role of the team of modelers?

- Come up with a set of variables that may affect sales and iterate on these variables until a robust model is achieved for the particular company in question and the KPI they are trying to model
**(CORRECT)** - Acquire data for a set number of variables that they know always influence sales in a similar way
- Advise marketers on how to effectively create ads to build successful campaigns

**Correct: That is right. The team of modelers will come up with a set of variables that they believe impacts the KPI – they do that in cooperation with the company they are building the model for. Then, they iterate on this set of variables in order to build a model that represents reality as closely as possible.**

### 5. Imagine you are working in the marketing department of a restaurant chain and your manager asks you to provide management with a monthly report that provides an update on the effect of each of the media channels used by your company on sales volume. What would be your best response?

- I can provide you with an estimate of the ROI for every media channel based on our monthly spending. And, every 6 months, I will include an update on the actual effect the different channels had on our sales.
**(CORRECT)** - Of course, I will re-run our MMM monthly so we can include the results in the report.

**Correct: Correct! You can use your existing MMM and the media curves to estimate the ROI based on your media mix for the current month. And, updating the MMM every 6 months can be an appropriate choice for a company that has a large marketing budget.**

## PRACTICE QUIZ: ATTRIBUTION

### 1. Which of the following business questions can you answer with an Attribution study? (Choose all that apply)

- Which of my creative executions in my video campaign works best to make people buy my product, the video filmed outside or the video filmed in a studio?
- What media channel should I invest more money in next year?
**(CORRECT)** - Which of my advertising campaigns last year drove most of my sales?
**(CORRECT)** - How much of my revenue was influenced by the Instagram campaign I ran in Q4?
**(CORRECT)**

**Correct: Exactly! This is a good example of a business question that can be answered with an Attribution study.**

### 2. Which rule-based attribution model is best described by the following definition?

### Gives 100% credit to the last click seen from a person before a conversion took place, even if an impression (ad view) was the last interaction.

- Time Decay
- First Touch
- Last Click
**(CORRECT)** - Last Touch

**Correct: Exactly! This describes the Last Click rule-based attribution model.**

### 3. Which rule-based attribution model is best described by the following definition?

### Gives more credit to touchpoints (clicks or impressions) based on how recently they happened. This attribution model gives an increasing percentage of the credit for a conversion to touchpoints as they get closer in time to the conversion.

- Time Decay
**(CORRECT)** - Positional
- First Click
- Even Credit

**Correct: Exactly! This describes the Time Decay rule-based attribution model.**

### 4. Which rule-based attribution model is best described by the following definition?

### Gives 100% credit for a conversion that happened to the first click or visit that happened in the conversion path. If there is no click or visit, then it will credit the conversion to the first impression.

- Last Touch
- First Click
- First Touch
**(CORRECT)** - Positional

**Correct: Exactly! This describes the First Touch rule-based attribution model.**

### 5. Which rule-based attribution model is best described by the following definition?

### First and last touchpoints (clicks or impressions) are given more credit, while the credit for the remaining touchpoints in the middle is divided equally.

- First Touch
- Even Credit
- Positional
**(CORRECT)** - Time Decay

**Correct: Exactly! This describes the Positional rule-based attribution model.**

## PRACTICE QUIZ: SALES FUNNEL ANALYSIS

### 1. What is this funnel shape called?

- A classic funnel
**(CORRECT)** - A blocker funnel
- A reverse funnel
- A footed funnel

**Correct: That’s correct!**

### 2. If you see the shape below and you’re in B2C marketing, what is the most likely thing you want to investigate?

- Your website
- Your pricing strategy
- Your check out flow
**(CORRECT)** - Your attribution model

**Correct: That’s correct!**

### 3. What is one question you’ll want to ask yourself at the interest and consideration stages of the sales funnel?

- What page are people entering our website on?
- What is the repurchase rate for returning users?
- What are people searching for on my site? Is it a specific item or category?
**(CORRECT)** - How long are people spending on their first page?

**Correct: That’s correct! You’ll want to investigate what people are looking for on your site.**

### 4. “Where do users drop off in the purchase process?” is a question you’d ask yourself in the _____ stage of the sales funnel.

- Awareness
- Consideration
- Interest
- Conversion
**(CORRECT)**

**Correct: That’s correct!**

## GRADED QUIZ: OPTIMIZATION

### 1. True or false? You would run a marketing mix modeling study to show how your advertising on different platforms contributed to company sales.

- True
**(CORRECT)** - False

**Correct: Correct! A marketing mix modeling study is needed when you have advertising across multiple platforms, like TV, Radio, and Facebook.**

### 2. A marketing mix model can help you better allocate your marketing budget by knowing what works and what doesn’t. True or False?

- True
**(CORRECT)** - False

**Correct: Exactly! A marketing mix model can help you better understand your marketing efforts.**

### 3. Which of the following is correct about a last click attribution model?

- It evenly spreads the credit for a conversion across all the ads a consumer clicked on before finally converting
- It gives credit to the ads in the conversion path based on a statistical attribution model
- It gives all the credit to the last ad a user saw or clicked on before converting
- It gives all the credit for a conversion to the last ad a user clicked on before converting
**(CORRECT)**

**Correct: Correct! Even if a person clicks on multiple ads, it assumes that the last ad they clicked on is solely responsible for the conversion.**

### 4. Attribution is the process of assigning credit to touch points along a customers conversion path. True or False?

- False
- True
**(CORRECT)**

**Correct: Correct! Attribution is the measurement solution that many marketers rely on to answer these questions.**

### 5. True or false? Statistical attribution models are not as robust as rule based attribution models and less accurately reflect reality.

- False
**(CORRECT)** - True

**Correct: Correct! Statistical models are in fact more robust and better reflect reality than rule based models as they use all available data to determine which ads impact results.**

### 6. Marketing Mix Modeling helps with in-channel optimization. True or False?

- True
**(CORRECT)** - False

**Correct: Exactly! This is not a strength of Marketing Mix Modeling.**

### 7. What is the last step of the Marketing Mix Modeling methodology?

- Modeling
**(CORRECT)** - Identify the variables affecting your outcome
- Data Collection
- Align variable types

**Correct: Correct! This is an important last step.**

### 8. Which of the following statements is true about connecting touchpoints to one individual person? (Select all that apply)

- Once a cookie is set in a user’s browser, it will be there forever and you can use that to monitor all the person’s actions on your site.
- Facebook Pixel, the SDK and the conversions API allow you to tie actions directly to real people due to Facebook’s ability to track persistent login and a unique identifier associated with a person’s Facebook account.
**(CORRECT)** - Historically, advertisers have relied on cookies to connect a sequence of touchpoints to a person.
**(CORRECT)** - It’s challenging for advertisers to connect the data from a person’s interactions with ads on mobile devices with that same person’s interactions on computers.
**(CORRECT)**

**Correct: Correct! Cookies are pieces of code that get added to a person’s web browser when they visit your site and when they see your ads.**

### 9. Awareness, Interest, Conversion, and Retention are the four stages of a sales funnel. True or False?

- True
**(CORRECT)** - False

**Correct: Exactly! These are the four common stages of a sales funnel.**

### 10. When you encounter a block in your funnel, which of the following approaches should you use to try to fix it?

- Spend more on ads
- Check out the flow
**(CORRECT)** - Change the product being sold
- Blame the customer

**Correct: Exactly! This is an important part of the troubleshooting process.**

### 11. Which of the following is correct about a time decay attribution model?

- It gives all the credit for a conversion to the last ad a user clicked on before converting.
- It evenly spreads the credit for a conversion across all the ads a consumer clicked on before finally converting.
- It gives credit to touchpoints (clicks or impressions) based on how recently they happened.
**(CORRECT)** - It gives all the credit to the last ad a user saw or clicked on before converting.

**Correct: Correct! This model gives more credit to touchpoints that happened more recently, so closer to the conversion.**

### 12. True or false? Attribution is mostly used to evaluate the impact of online media channels on a purchase.

- True
**(CORRECT)** - False

**Correct: Correct! You can also use it across online and offline channels like TV for instance, but, since the data is not always as easy to get by, the results from this type of cross-channel analysis are not as immediate.**

### 13. Why may advertisers want to use attribution modeling studies?

- Attribution modeling can help advertisers understand the effect of their ads on ad recall
- Attribution modeling can help advertisers understand how much influence their ads on different platforms had on their result
**(CORRECT)** - Attribution modeling helps advertisers evaluate the incremental lift in sales caused by each of their ads.
- Attribution studies help to test different variables of an ad and understand which variables work best and drive the best results

**Correct: Correct! This can then influence how the advertising budget is spent.**

### 14. Which of the following is not true about Marketing Mix Modeling? (select all that apply)

- Need high quality data
- Great for big picture
- Helps with in-channel optimization
**(CORRECT)** - Great for granularity
**(CORRECT)**

**Correct: Exactly! This is not true of Marketing Mix Modeling.**

### 15. Which of the following are part of the Marketing Mix Modeling methodology? (select all that apply)

- Align variable types
- Data Collection
**(CORRECT)** - Identify the variables affecting your outcome
**(CORRECT)** - Modeling
**(CORRECT)**

**Correct: Correct! This is an important part of the process.**

### 16. Which of the following describes some of the most common challenges we face when measuring the effect of advertising across different marketing platforms?

- It’s not always easy to connect data from different platforms and devices. Also, connecting all the advertising touchpoints to one individual user can be challenging
**(CORRECT)** - It is often challenging to create a test with enough power or a high enough confidence interval
- It is hard to connect data from people who log in to Facebook on both their mobile device and on the web
- It can be challenging to randomly assign people to a control or an experimental group

**Correct: Correct! These are both major challenges when trying to measure advertising effectiveness across platforms.**

### 17. When troubleshooting a block in a sales funnel, it is important to check out the flow. True or False?

- False
- True
**(CORRECT)**

**Correct: Exactly! This is an important part of the troubleshooting process.**

### 18. A marketing mix model can only help you understand the impact of organic engagement on your sales. True or False?

- True
- False
**(CORRECT)**

**Correct: Exactly! A marketing mix model can help you better understand your marketing efforts, which includes all market approaches.**

### 19. Attribution has nothing to do with ROI. True or False?

- True
- False
**(CORRECT)**

**Correct: Correct! Attribution helps you understand the ROI for different channels.**

### 20. True or false? In statistical or math attribution models you let the data speak and you don’t decide on a model ahead of time.

- True
**(CORRECT)** - False

**Correct: Correct! Instead of using your intuition to choose a rule, a statistical model uses the available data to figure out which touchpoints have the most influence.**

### 21. True or false? Historically, advertisers have relied on cookies to connect a sequence of touchpoints to a person.

- True
**(CORRECT)** - False

**Correct: Correct! Cookies are pieces of code that get added to a person’s web browser when they visit your site and when they see your ads. The cookie then let’s your advertising or measurement platform know which ads people interacted with or saw.**

### 22. Which of the following are stages of a sales funnel? (select all that apply)

- Exploration
- Conversion
**(CORRECT)** - Retention
**(CORRECT)** - Awareness
**(CORRECT)**

Correct: Exactly! These are part of the stages of a sales funnel.

### 23. Imagine you work in the marketing department of a large clothing retailer. You want to run a marketing mix modeling study.

### Which of the following statements regarding the benefits of conducting this study are true? (Select all that apply)

- Is solely used to determine on which platform your advertisement performed best
- It can help plan how to best spend your money next year to improve results
**(CORRECT)** - It can help you analyze last year’s data to understand which marketing activities contributed most to your results
**(CORRECT)** - It can help you predict what will work in the future for your company
**(CORRECT)**

**Correct: Correct! After analyzing the data, you’ll have a report that tells you what the Return on Investment was for each one of the channels you used and how much each channel contributed to your final results. This will help guide future marketing decisions.**

**Correct: Correct! When running a marketing mix modeling study, you’ll collect data related to any previous marketing actions and look at data on how much you spent and what results you got.**

**Correct: Correct! A marketing mix model can help you better understand your marketing efforts which will help you figure out where to allocate your marketing budget.**

### 24. What are the four stages of most sales funnels?

- Awareness, Interest, Conversion, Retention
**(CORRECT)** - Curiosity, Interest, Conversion, Retention
- Awareness, Curiosity, Exploration, Conversion
- Awareness, Interest, Exploration, Conversion

**Correct: Exactly! These are the four common stages of a sales funnel.**

### 25. Before you recommend Marketing Mix Modeling, what should you consider? (select all that apply)

- Helps with in-channel optimization
- Great for granularity
- Great for big picture
**(CORRECT)** - Need high quality data
**(CORRECT)**

**Correct: Exactly! This is a strength of Marketing Mix Modeling.**

**Correct: Correct! This is something you need before you can get started.**

### 26. Imagine you work in the marketing department of a large clothing retailer. You are working on a ‘year in review’ presentation and you would like to show how your advertising on different platforms (TV, radio, Facebook and YouTube) contributed to sales for the denim line you introduced this year.

### You reach out to a market research agency to help you with this. What type of study should they do for you?

- They should run a Brand Survey Test
- They should run an A/B test
- They should run a marketing mix modeling study
**(CORRECT)** - They should conduct a Holdout Test

**Correct: Correct! A marketing mix modeling study is needed when you have advertising across multiple platforms, like TV, Radio, and Facebook.**

### 27. Which of the following are part of the troubleshooting process for a blocked funnel? (Select all that apply)

- Change the product being sold
- Check for missing information
**(CORRECT)** - Check out the flow
**(CORRECT)** - Evaluate the selling process
**(CORRECT)**

**Correct: Exactly! This is an important part of the troubleshooting process.**

### 28. What is the first step of the Marketing Mix Modeling methodology?

- Data Collection
- Predict your KPI
- Modeling
- Identify the variables affecting your outcome
**(CORRECT)**

**Correct: Correct! This is an important first step.**

### 29. A marketing mix model can help you… (Choose all that apply.)

- Understand the impact of organic engagement alone on your sales.
- Understand the impact of Facebook ads alone on your sales.
- Help you better allocate your marketing budget by knowing what works and what doesn’t.
**(CORRECT)** - Better understand the impact of your marketing efforts.
**(CORRECT)**

**Correct: Correct! A marketing mix model can help you better understand your marketing efforts.**

### 30. Which of the following is correct about a positional model?

- It gives credit to the ads in the conversion path based on a statistical attribution model
- It gives more credit to first and last touch points whether they are clicks or impressions, while the credit for the remaining touchpoints in the middle is divided equally.
**(CORRECT)** - It gives all the credit to the last ad a user saw or clicked on before converting.
- It evenly spreads the credit for a conversion across all the ads a consumer clicked on before finally converting.

**Correct: Correct! In the positional model, more importance is placed on first and last touch points.**

## DATA ANALYTICS METHODS FOR MARKETING FINAL QUIZ

### 1. For this final project, we are going to follow James at Snackwall. James launched Snackwall a year ago, and so far, it’s been a real success. Now, James is eager to expand his audience and he is preparing to give his manager an overview of the past year’s success and ask for an advertising budget to help him grow the business.

### James knows that going to his boss with a solid plan will help to convince him to allocate marketing budget to the expansion of Snackwall.

### As a starting point, James identifies the segments that he should focus on for his advertising campaign. After all, James knows that it would not be a good use of his money to market to everyone. James relies on K-means clustering, using last year’s data on business size and amount spent for Snackwall clients. James worked with Alya, his analyst, and together they ran several iterations of their K-means clustering. Now they are using the chart below to determine the number of clusters James should focus on in his campaign.

### How many segments do you suggest James defines for his marketing campaign based on this plot?

- 2 Clusters
- 3 Clusters
**(CORRECT)** - 1 Cluster
- 4 Clusters

**Correct: Exactly! That is where the elbow is.**

### 2. Based on the K-means clustering, James found 3 clusters that seem to define his current client base. Since James used the dollar amount spent and the business size as the starting variables for his cluster analysis, he knows that the segments are quite distinct in terms of these variables.

### How would you define Cluster 1?

- None of these are true
- Small businesses that spend a medium amount.
- Medium businesses that spend little.
**(CORRECT)** - Large businesses that spend a little.

**Correct: Exactly! This is what the chart shows.**

### 3. James decides that he should focus on the third cluster for his marketing campaign. He believes this segment has more potential, because he has seen from his previous campaign that it is a little harder to convince large businesses to subscribe. After the profiling exercise, he decides to call the segment the ‘Health conscious startups’ to help other people understand and remember this segment.

### Next, James turns to showing his management that the advertising budget he was given last year was money well spent. So, James calculates the Return on Ad Spend for last year, and he looks at ROAS by cluster.

### He shows the following results based on the total ad spend last year of $200K. The total revenue generated was $800K. The total cost invested last year was $500K, so the profit for the year for Snackwall was $300K.

- The ROAS for Snackwall last year was: 400%.
**(CORRECT)** - The ROAS for Snackwall last year was: 150%.
- The ROAS for Snackwall last year was: $800K.
- The ROAS for Snackwall last year was: $200K.

**Correct: Exactly! This is the calculated ROAS.**

### 4. James understands that his management will also want to know the ROI for the advertising campaign he ran last year. The equation to calculate ROI is ROI = (net spend / net profit) * 100. True or False?

- False
**(CORRECT)** - True

**Correct: Exactly! The equation for ROI is ROI = (net profit / net spend) * 100.**

### 5. James is hoping to get a substantial advertising budget for next year. To achieve that, he knows that it would help to show the CLTV for his clients. That may help convince management that their investment now will really pay off in the future. But, since James only launched Snackwall a year ago, it is going to be difficult to show CLTV. The problem is the value of the Customer Retention Period. True or False?

- False
- True
**(CORRECT)**

**Correct: Exactly! James would have trouble with this variable.**

### 6. James decides to estimate the retention period for his clients. He believes that he can keep a client for 3.5 years, which is similar to the retention period for the cleaning subscription side of his business. With this in mind, what is the CLTV for Snackwall if the following is true:

- Average order value = $1800
- Average number of orders per year = 9
- Profit Margin = 63%

- $3,717,000
- $35,721
**(CORRECT)** - $258.125
- $10,629

**Correct: Exactly! This is the CLTV**

### 7. Finally, for his budget presentation, James showed the following chart from a linear regression analysis he ran, evaluating the influence of advertising spending on sales, based on last year’s experience. What does this chart help James prove?

- There is a positive correlation between advertising spending and sales, and R2 suggests that we can be confident that our data fit this result.
**(CORRECT)** - There is a positive correlation between advertising spending and sales in 93.5% of the cases
- There is a negative correlation between advertising spending and sales.
- Sales and advertising spending are 93.5% correlated.

**Correct: Exactly! That is what this chart indicates.**

### 8. James’ management is happy with the progress he made last year, and his presentation was a success. He is given a large advertising budget for the next year, in fact, his budget will now be $250K. James’ manager told him that he trusts he will use the budget well, but that he wants to see that the advertising campaigns James runs are resulting in additional subscriptions.

### James should plan to run an attribution study. True or False?

- False
**(CORRECT)** - True

**Correct: Exactly! It would be more appropriate to run a random control trial experiment.**

### 9. Before spending any of his budget, James wants to compare the results from all of his different marketing channels over the past year, to see where his budget would make the most impact. What study should James run to analyze the impact of all of his marketing initiatives on sales?

- A/B Testing
- Random Control Trial
- Marketing Mix Model
**(CORRECT)** - Attribution

**Correct: Exactly! MMM is the appropriate approach.**

### 10. While optimizing the sales process, James creates a visualization to represent the sales funnel.

### Based on this visualization, which approach should James take to increase subscriptions?

- This is a reverse funnel, he needs to increase awareness of his product.
- This funnel is a blocker, he should consider why customers are getting stuck at this stage.
- This is a tornado funnel, he needs to check out the flow.
- This is a classic funnel, things are looking healthy, James does not need to change anything in his approach.
**(CORRECT)**

**Correct: Exactly! This is how it should look.**

### 11. Based on the K-means clustering, James found 3 clusters that seem to define his current client base. Since James used the dollar amount spent and the business size as the starting variables for his cluster analysis, he knows that the segments are quite distinct in terms of these variables.

### How would you define Cluster 3?

- Medium businesses that spend a medium amount.
- Large businesses that spend little.
- None of these are true
- Small businesses that spend a lot.
**(CORRECT)**

**Correct: Exactly! That is what this chart shows.**

### 12. James understands that his management will also want to know the ROI for the advertising campaign he ran last year. Which of the following formulas should James use to calculate the ROI?

- ROI = (revenue made from ads / advertising spend) * 100
- ROI = (net profit / net spend) * 100
**(CORRECT)** - ROI = (net spend / net profit) * 100
- ROI = (net profit * net spend) / 100

**Correct: Exactly! This is the equation for ROI.**

### 13. James is hoping to get a substantial advertising budget for next year. To achieve that, he knows that it would help to show the CLTV for his clients. That may help convince management that their investment now will really pay off in the future. But, since James only launched Snackwall a year ago, it is going to be difficult to show CLTV. What value is James missing to calculate CLTV?

- Average Number of Transactions
- Profit Margin
- Customer Retention Period
**(CORRECT)** - Average Value of a Sale

**Correct: Exactly! He would not have this value.**

### 14. James decides to estimate the retention period for his clients. He believes that he can keep a client for 3.5 years, which is similar to the retention period for the cleaning subscription side of his business. With this in mind, what is the CLTV for Snackwall if the following is true:

- Average order value = $1000
- Average number of orders per year = 15
- Profit Margin = 46%

- $258.125
- $24,150
**(CORRECT)** - $10,629
- $3,717,000

**Correct: Exactly! This is the CLTV**

### 15. Finally, for his budget presentation, James showed the following chart from a linear regression analysis he ran, evaluating the influence of advertising spending on sales, based on last year’s experience. This chart helps James prove that sales and advertising spending are 93.5% correlated. True or False?

- False
**(CORRECT)** - True

**Correct: Exactly! That is not what this chart indicates.**

### 16. James’ management is happy with the progress he made last year, and his presentation was a success. He is given a large advertising budget for the next year, in fact, his budget will now be $250K. James’ manager told him that he trusts he will use the budget well, but that he wants to see that the advertising campaigns James runs are resulting in additional subscriptions.

### What type of test should James plan to make sure he can prove this to his boss?

- James should plan to have a marketing mix model created
- James should plan to run an attribution study
- James should plan to run a random control trial experiment
**(CORRECT)** - James should plan to run an A/B test

**Correct: Exactly! This is the appropriate study for this application.**

### 17. Before spending any of his budget, James wants to compare all of the results in the different marketing channels last year, to see where his budget would make the most impact. James should run an Attribution Study to analyze the impact of all of his marketing initiatives on sales. True or False?

- False
**(CORRECT)** - True

**Correct: Exactly! Attribution is not the appropriate approach.**

### 18. Based on the K-means clustering, James found 3 clusters that seem to define his current client base. Since James used the dollar amount spent and the business size as the starting variables for his cluster analysis, he knows that the segments are quite distinct in terms of these variables.

### How would you define Cluster 2?

- None of these are true
- Medium businesses that spend a lot.
- Large businesses that spend a medium amount.
**(CORRECT)** - Small businesses that spend little.

**Correct: Exactly! That is what this chart shows.**

### 19. James is hoping to get a substantial advertising budget for next year. To achieve that, he knows that it would help to show the CLTV for his clients. That may help convince management that their investment now will really pay off in the future. But, since James only launched Snackwall a year ago, it is going to be difficult to show CLTV. Which of the values that James requires to calculate CLTV does he have access to? (Select all that apply)

- Customer Retention Period
- Average Number of Transactions
**(CORRECT)** - Profit Margin
**(CORRECT)** - Average Value of a Sale
**(CORRECT)**

**Correct: Exactly! This is a value he can find.**

### 20. While optimizing the sales process, James creates a visualization to represent the sales funnel.

### Based on this visualization, which approach should James take to improve subscription rates?

- This funnel is a blockage, he should consider why customers are getting stuck at the interest stage.
**(CORRECT)** - This is a classic funnel, things are looking healthy, James does not need to change anything in his approach.
- This is a reverse funnel, he needs to increase awareness of his product.
- This is a tornado funnel, he needs to check out the flow.

**Correct: Exactly! This funnel is blocked, and the process needs to be evaluated.**

### 21. James decides that he should focus on the third cluster for his marketing campaign. He believes this segment has more potential, because he has seen from his previous campaign that it is a little harder to convince large businesses to subscribe. After the profiling exercise, he decides to call the segment the ‘Health conscious startups’ to help other people understand and remember this segment.

### Next, James turns to showing his management that the advertising budget he was given last year was money well spent. So, James calculates the Return on Ad Spend for last year, and he looks at ROAS by cluster.

### He shows the following results based on the total ad spend last year of $120K. The total revenue generated was $940K. The total cost invested last year was $510K, so the profit for the year for Snackwall was $430K.

- The ROAS for Snackwall last year was: 358%.
- The ROAS for Snackwall last year was: $430K.
- The ROAS for Snackwall last year was: $940K.
- The ROAS for Snackwall last year was: 783%.
**(CORRECT)**

**Correct: Exactly! This is the calculated ROAS.**

### 22. While optimizing the sales process, James creates a visualization to represent the sales funnel.

### Based on this visualization, which approach should James take to increase subscriptions?

- This is a reverse funnel, he needs to increase awareness of his product.
**(CORRECT)** - This funnel is a blocker, he should consider why customers are getting stuck at this stage.
- This is a classic funnel, things are looking healthy, James does not need to change anything in his approach.
- This is a tornado funnel, he needs to check out the flow.

**Correct: Exactly! A reverse funnel suggests low brand awareness.**

### 23. For this final project, we are going to follow James at Snackwall. James launched Snackwall a year ago, and so far, it’s been a real success. Now, James is eager to expand his audience and he is preparing to give his manager an overview of the past year’s success and ask for an advertising budget to help him grow the business.

### James knows that going to his boss with a solid plan will help to convince him to allocate marketing budget to the expansion of Snackwall.

### As a starting point, James identifies the segments that he should focus on for his advertising campaign. After all, James knows that it would not be a good use of his money to market to everyone. James relies on K-means clustering, using last year’s data on business size and amount spent for Snackwall clients. James worked with Alya, his analyst, and together they ran several iterations of their K-means clustering. Now they are using the chart below to determine the number of clusters James should focus on in his campaign.

### How many segments do you suggest James defines for his marketing campaign based on this plot?

- 2 Clusters
- 1 Cluster
- 3 Clusters
- 4 Clusters
**(CORRECT)**

**Correct: Exactly! That is where the elbow is.**

### 24. James decides that he should focus on the third cluster for his marketing campaign. He believes this segment has more potential, because he has seen from his previous campaign that it is a little harder to convince large businesses to subscribe. After the profiling exercise, he decides to call the segment the ‘Health conscious startups’ to help other people understand and remember this segment.

### Next, James turns to showing his management that the advertising budget he was given last year was money well spent. So, James calculates the Return on Ad Spend for last year, and he looks at ROAS by cluster.

### He shows the following results based on the total ad spend last year of $250K. The total revenue generated was $750K. The total cost invested last year was $500K, so the profit for the year for Snackwall was $250K.

- The ROAS for Snackwall last year was: 100%.
- The ROAS for Snackwall last year was: 300%.
**(CORRECT)** - The ROAS for Snackwall last year was: $750K.
- The ROAS for Snackwall last year was: $250K.

Correct: Exactly! This is the calculated ROAS.

### 25. Finally, for his budget presentation, James showed the following chart from a linear regression analysis he ran, evaluating the influence of advertising spending on sales, based on last year’s experience. What does this chart help James prove? (Select all that apply)

- There is a negative correlation between advertising spending and sales.
- Sales and advertising spending are 93.5% correlated.
- R2 suggests that we can be confident that our data fits this result.
**(CORRECT)** - There is a positive correlation between advertising spending and sales.
**(CORRECT)**

**Correct: Exactly! This is a value he can find.**

### 26. James decides to estimate the retention period for his clients. He believes that he can keep a client for 3.5 years, which is similar to the retention period for the cleaning subscription side of his business. With this in mind, what is the CLTV for Snackwall if the following is true:

- Average order value = $1500
- Average number of orders per year = 12
- Profit Margin = 59%

- $3,717,000
- $10,629
- $258.125
- $37,170
**(CORRECT)**

**Correct: Exactly! This is the CLTV.**

### 27. Before spending any of his budget, James wants to compare the results he achieved in all of his different marketing channels last year, to see where his budget would make the most impact. James should run a Marketing Mix Model to analyze the impact of all of his marketing initiatives on sales. True or False?

- False
- True
**(CORRECT)**

**Correct: Exactly! MMM is the appropriate approach.**

### 28. For this final project, we are going to follow James at Snackwall. James launched Snackwall a year ago, and so far, it’s been a real success. Now, James is eager to expand his audience and he is preparing to give his manager an overview of the past year’s success and ask for an advertising budget to help him grow the business.

### James knows that going to his boss with a solid plan will help to convince him to allocate marketing budget to the expansion of Snackwall.

### As a starting point, James identifies the segments that he should focus on for his advertising campaign. After all, James knows that it would not be a good use of his money to market to everyone. James relies on K-means clustering, using last year’s data on business size and amount spent for Snackwall clients. James worked with Alya, his analyst, and together they ran several iterations of their K-means clustering. Now they are using the chart below to determine the number of clusters James should focus on in his campaign.

### How many segments do you suggest James defines for his marketing campaign based on this plot?

- 2 Clusters
**(CORRECT)** - 3 Clusters
- 1 Cluster
- 4 Clusters

**Correct: Exactly! That is where the elbow is.**

### 29. James understands that his management will also want to know the ROI for the advertising campaign he ran last year. Which of the following formulas do NOT calculate ROI. (Select all that apply)

- ROI = (net profit / net spend) * 100
- ROI = (net profit * net spend) / 100
**(CORRECT)** - ROI = (revenue made from ads / advertising spend) * 100
**(CORRECT)** - ROI = (net spend / net profit) * 100
**(CORRECT)**

**Correct: Exactly! For more information on this topic, please review the video Return on Ad Spend (ROAS) and Return on Investment (ROI).**

### 30. James’ management is happy with the progress he made last year, and his presentation was a success. He is given a large advertising budget for the next year, in fact, his budget will now be $250K. James’ manager told him that he trusts he will use the budget well, but that he wants to see that the advertising campaigns James runs are resulting in additional subscriptions.

### James should plan to run a random control trial experiment. True or False?

- False
- True
**(CORRECT)**

**Correct: Exactly! This is the appropriate study for this application.**

### 31. A marketing mix model can help you… (Choose all that apply.)

- Understand the impact of organic engagement alone on your sales
- Understand the impact of Facebook ads alone on your sales
- Better allocate your marketing budget by knowing what works and what doesn’t
**(CORRECT)** - Better understand the impact of your marketing efforts
**(CORRECT)**

**Correct: Correct! A marketing mix model can help you better understand your marketing efforts.**

### 32. How much data do you need for an accurate marketing mix model, at the very least

- Five years’ worth
- One month’s worth
- Two years’ worth
**(CORRECT)** - One year’s worth

**Correct: Correct! In order to have an accurate and insightful model, you would need at least two years’ worth of data.**

### 33. A marketing mix model is essentially a series of…

- Regression models
**(CORRECT)** - Cluster models
- Time series models
- Classification models

**Correct: Correct! A marketing mix model does its analysis by using regression models.**

### 34. What elements are needed to conduct a successful Marketing Mix Model analysis? (Select all that apply.)

- Variables with inadequate impact
- Historical data that goes back 5 years
- Long historical data window
**(CORRECT)** - High quality data
**(CORRECT)**

**Correct: That’s correct! A long historical data window allows for more variation within each variable.**

**Correct: That’s correct! High quality data helps to insure that you achieve a high quality analysis.**

### 35. Which ad caused Kathy to buy the mattress?

- The Facebook Newsfeed Ad
- All ads may have had some effect on Kathy’s decision to buy
**(CORRECT)** - The ad Kathy clicked on
- The YouTube video ad

**Correct: Correct! Kathy’s decision to purchase was probably influenced by all these ads to some extent.**

### 36. Should Imra conclude to put all her advertising dollars in a Facebook campaign with a coupon next year?

- No
**(CORRECT)** - Yes

**Correct: That is right! It is unlikely that the ad with the coupon will work as well without the awareness campaign.**

### 37. What does Facebook leverage to help solve the challenge of connecting touchpoints to one person? (Select all that apply)

- Cookies
- A unique identifier linked to a Facebook account
**(CORRECT)** - The pixel
**(CORRECT)** - A persistent login
**(CORRECT)**

**Correct: Correct! This is one way that Facebook helps connect the dots between touchpoints.**

### 38. You head into your site analytics tool and see people dropping off after visiting your homepage. What is one of the first questions you might ask your data?

- Where do users drop off in the conversion?
- What is the repurchase rate for returning users?
- What channel are people coming from?
**(CORRECT)**

**Correct: That’s right! We will want to understand what users are expecting from our homepage so we need to see where they’re coming from.**

### 39. What does a “reverse funnel” shape tell you?

- You may have too many people in the consideration and evaluation phases of the funnel
- You have too many people in your funnel
- You have a healthy funnel
- You may have too many people in the conversion phase of the funnel
**(CORRECT)**

**Correct: That’s correct!**

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