Data Analytics in Business Part 1 Theory Solutions

Homework 3 Part 1 60 points (all questions 5 points) Q.1 From 2012 to 2018, which pricing model (Performance, CPM, Hybrid) has brought in the most revenue? a) Performance pricing model b) CPM pricing model c) Hybrid pricing model d) All models have performed the same Answer: A) Performance Pricing Model Explanation: Week 7, Video 3, Slide 13 Q.2 Which customer metadata is not well suited for analyzing customer churn? a) b) c) d) Social Security Number Zip Code Spending Habits Hobbies Answer: A) Social Security Number Explanation: Social Security Number is a personal identification number and is not a great way to segment customers. View additional material on Brand Loyalty and Customer Churn Q.3 What does CPM stand for? a) b) c) d) Cost Per Million Cost Per Thousand Counts Per Hundred None of the Above Answer: b) Cost Per Thousand Explanation: CPM = Cost Per Mille = Cost Per Thousand. View Week 9, Video 1, Slide 6 Q.4 Which of the following statements is correct with respect to Bounce Rate? a) Bounce Rate gives an indication of the proportion of visitors who did not interact with the website. b) Bounce Rate tells us how long, on average, visitors are staying on our website. c) Bounce Rate increases when someone loads a page and decreases after 30 minutes of inactivity. d) A high Bounce Rate generally indicates that the website entrance pages are very relevant to the website’s visitors. Answer: a) Bounce Rate gives an indication of the proportion of visitors who did not interact with the website Explanation: Week 11, Video 2, Slide 19  Average Session Duration defines how long, on average, visitors are staying on the website.  A session starts right away when someone loads a page and ends after 30 minutes of inactivity.  A high Bounce Rate generally indicates that the website entrance pages are not relevant to the website’s visitors. Q.5 A company is doing an ad campaign where the details of the ad are presented below. Assume that on average each customer buys two products during the customer’s lifetime with the company. Metric Avg CPC (Cost per click) Conversion Rate Avg Sale Value Profit Margin Value $1.05 7% $80 20% What is the break-even price of average CPC per customer over lifetime? a) $1.12 b) $2.24 c) $1.19 d) $2.48 Answer: b) $2.24 Explanation: Week 10, Video 2, Slide 23  Profit Margin per sale = $80*0.2 = 16   Profit Margin per customer lifetime (excluding advertisement costs) = 2 * 16 = 32 For break even the cost = 32*0.07 = 2.24 Q.6 Which of the following methods of Improving Customer Conversion Rates involves randomly splitting the traffic amongst two or more different versions of a webpage? a) b) c) d) Usability Testing Competitor Benchmarking A/B Testing Segmentation Answer: c) A/B Testing Explanation: Week 11, Video 1, Slide 15  Usability Testing is the practice of evaluating the functionality of your webpage by testing it with actions and behaviors of users as they use the website.  Competitor Benchmarking is comparing your website against your competitors’ and evaluating your website’s functionality.  Segmentation is the division of the traffic based on some similar characteristic that can help to identify the targeted customers. Q.7 A website that uses Google Analytics wants to know how long visitors are spending on their landing page. Which metric should they use? a) b) c) d) Average Session Duration Pages Per Session Pageviews Bounce Rate Answer: a) Average Session Duration Explanation: Week 11, Video 2, Slide 20 Questions 8-9 can be answered using the Chase case study: Q.8 In the Chase case study, Chase segmented customers based on the types of rewards they preferred. Which segmentation strategy does Chase use? a) Behavioral method b) Demographic method c) Geographic method Answer: a) Behavioral Method Explanation: The following line from the case study may be used to answer the above question: “Behavioral/attitudinal segmentation provided insight into how consumers used their cards and how much they valued rewards and/or what types of rewards they preferred (cashback, miles, points) as well as their channel preferences.” Q.9 A complete economics of credit card transaction includes: a) b) c) d) Card Issuer; Merchant Acquirer; Merchant Card Issuer; Cardholder; Merchant Issuer; Merchant Card Issuer; Cardholder; Merchant; Merchant Acquirer; Credit Card Network Card Issuer; Cardholder; Merchant; Merchant Issuer; Credit Card Network Answer: c) Card Issuer; Cardholder; Merchant; Merchant Acquirer; Credit Card Network Explanation: Q.10 Which factors does Google use to determine your ad rank? a) b) c) d) Company Brand, Marketing Budget Ad Break Even Price, Total Spent on Ads Maximum Bid, Ad Quality Score Company Financial Score, Landing Page Appearance Answer: c) Maximum Big, Ad Quality Score Explanation: Week 10, Video 2, Slide 15 Q.11 Which of the following can have an impact on how visitors and potential customers interact with your landing page: a) b) c) d) Page Header Call to Action, and Offer Page Layout, Color, and Images All of the above Answer: d) All of the above Explanation: Week 11, Video 1, Slide 14 Q.12 If your favorite tv show has a HUT of 80 and a Rating of 20, what is the Share of that show? a) b) c) d) 25 50 75 Not enough information given Answer: a) 25 Explanation: Week 9, Video 1, Slide 7  SHARE = (RATING / HUT) * 100 = (20/80) * 100 = 0.25 * 100 = 25