Table 1 shows an online retailer's trial of two advert messages for a new hiking backpack. Each advert was shown for the same number of days on the same web...
Question 1 Report
Table 1 shows an online retailer's trial of two advert messages for a new hiking backpack. Each advert was shown for the same number of days on the same website. The retailer is using the results as market research before it commits its advertising budget.
Table 1
| Advert message | Number of people who clicked | Number who bought |
|---|---|---|
| “Lightweight for long walks” | 540 | 54 |
| “Built to carry more gear” | 420 | 63 |
(a) Which advert led to more sales? [1]
(b) Show the conversion rate for the “Built to carry more gear” advert. [2]
(c) Identify one reason why the retailer should not base its final decision only on click numbers. [1]
(d) Explain one way this trial reduces the risk of the advertising decision. [2]
Answer Details
(a) “Built to carry more gear” led to more sales, with 63 purchases compared with 54. [1]
(b) Conversion rate measures the percentage of people who clicked and then bought:
\[\frac{63}{420}\times100=15\%\]
The conversion rate is 15%. [2]
(c) The retailer should not base its decision only on click numbers because clicks do not necessarily result in purchases or sales. [1] The advert with fewer clicks in this trial produced more purchases.
(d) The trial provides evidence of customers' actual response before the retailer spends its full advertising budget. [1] It can choose a message more likely to generate sales and avoid wasting promotion costs on a less effective message. [1]
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