Scenario #
A campaign spends ₹40,000. It records ₹120,000 in attributed revenue. Product cost and fulfillment associated with those sales total ₹54,000, and additional campaign-specific costs total ₹6,000. For this exercise, assume the ₹120,000 revenue is measured consistently, but incremental lift is not known.
Your task #
- Calculate ROAS using attributed revenue ÷ ad spend.
- Calculate contribution after the stated product/fulfillment costs and ad spend.
- Calculate the simplified ROI using the explicitly stated investment and contribution definition you choose.
- Explain why this is not necessarily incremental profit or a full business ROI.
- List additional data needed: baseline sales, returns, discounts, other costs, conversion lag and attribution method.
- Recommend how you would test whether the campaign generated additional sales.
Answer check #
ROAS = ₹120,000 ÷ ₹40,000 = 3.0 (300%). After ₹54,000 product/fulfillment cost and ₹40,000 ad spend, the remaining amount is ₹26,000 before the additional ₹6,000 campaign-specific costs; after those costs it is ₹20,000 under these simplified assumptions. This still does not prove incrementality or include every possible business cost.
Submission and rubric #
Submit formulas, a calculation sheet and a short interpretation. Scoring: formulas and arithmetic 35; assumptions 20; distinction between ROAS and ROI 25; limitations and next test 20.
