Evaluate Key Metrics for Capital One Ad Campaign
Overview
This question evaluates proficiency in ad campaign analytics, ROI and unit-economics calculations, conversion-rate reasoning, and cost-benefit decision-making within the Analytics & Experimentation domain for a data scientist role, with emphasis on practical application over purely conceptual theory.
Streaming Ad Campaign Evaluation and ROI Comparison
Context
You are evaluating a credit-card marketing campaign on a streaming platform. The platform can run either a 30-second unskippable ad or a skippable ad. You must identify what to evaluate before launching, compute the profit for the unskippable plan, find the conversion needed for the skippable plan to match that profit, compare against the option of running no campaign, and propose additional data/analyses to strengthen a recommendation.
Assumption for clarity: The 1.4% "click-to-apply conversion" is treated as the overall view-to-application rate (i.e., fraction of all viewers who submit an application). Approval rate is the fraction of applications approved.
Given
- Viewers (impressions delivered): 100,000
- Fixed cost (creative/production): $50,000
- Unskippable ad: cost per view (CPV) = $0.10
- Revenue per approved account: $500
- View-to-application rate: 1.4%
- Approval rate: 50%
Skippable variant:
- Cost per watched view: $0.30
- 80% skip rate (so 20% watch)
Tasks
- Before placing any ads, list key factors to evaluate (metrics, customer segments, risks).
- Compute profit or loss for the unskippable campaign with the given inputs.
- For the skippable ad, what minimum application conversion rate (among watchers) keeps profit equal to the unskippable plan? Also report the implied overall application rate across all 100,000 viewers.
- With a third option of no campaign, how would you decide among the three options?
- With extra time, what additional data or analyses would you request to strengthen your recommendation?
Solution
Login required