Determine Channel Performance with Additional Metrics Needed

Q: Determine Channel Performance with Additional Metrics Needed

This question evaluates proficiency in marketing-funnel analytics, quantitative channel performance calculation, and revenue estimation, testing skills relevant to a Data Scientist role in the analytics and experimentation domain.

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Question

Compute Expected Purchases and Revenue by Channel

Context

A company sells a product through three channels: online, phone, and email. For each channel, you are given:

Impressions (I)
Click-through rate (CTR)
Conversion rate (CVR)
An average order value (AOV) may be supplied

Assume CTR and CVR are provided as percentages and represent:

CTR: probability of a click given an impression
CVR: probability of a purchase given a click (post-click conversion)

Task

Compute the expected number of purchases for each channel.
Rank channels by conversion efficiency.
Compute and rank overall expected revenue given AOV.
List additional metrics you would request to judge channel performance more holistically.

Formulas

Expected purchases per channel: Purchases = Impressions × CTR × CVR
Conversion efficiency (two useful views):
- Post-click efficiency: CVR
- End-to-end efficiency per impression: CTR × CVR
Expected revenue: Revenue = Purchases × AOV

Hint: Compare per-impression or per-click ROI when cost data are available.

Determine Channel Performance with Additional Metrics Needed

Compute Expected Purchases and Revenue by Channel

Context

Task

Formulas

Solution

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