MGT – 6203: Homework 3
100 points: Part 1 (60 points Quiz) + Part 2 (40 points Peer-Corrected)
Part 1 (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
Explanation: Week 7, Video 3, Slide 13
Q.2 What does CPM stand for?
a. Cost Per Million
b. Cost Per Thousand
c. Counts Per Hundred
d. None of the Above
Explanation: CPM = Cost Per Mille = Cost Per Thousand
Q.3 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
Explanation: Statement A is correct.
B) Average Session Duration defines how long, on average, visitors are staying on the
website.
C) A session starts right away when someone loads a page and ends after 30 minutes of
inactivity.
D) A high Bounce Rate generally indicates that the website entrance pages are not relevant
to the website’s visitors.
Q.4 A company is doing an ad campaign where the details of the ad are presented below.
, (Assume that a customer would purchase twice in his/her life-time upon watching the
advertisement once)
Metric Value
Avg CPC (Cost per click) $1.05
Conversion Rate 7%
Avg.Sale Value $80
Profit Margin 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
Solution: 32*0.07 = 2.24
PPC Conversion cost = $1.05/0.07 = 15
Profit Margin per sale = $80*0.2 = 16
Profit Margin per customer over lifetime (excluding advertisement costs) = 32
Total profit per customer = 32 – 15 = 17
For break even the cost = 32*0.07 = 2.24
Q.5 The objective of Conversion Rate Optimization (CRO) is to:
A. Increase number of website visitors
B. Increase website sales
C. Enhance engagement
D. All the above
Answer: D
Explanation: From the slides, we learnt that Conversion rate optimization (CRO) is the
systematic process of increasing the percentage of website visitors who take a desired
action. Desired actions are different based on website goals. So above choices are general
goals of all websites, and they are CRO goals.
Q.6 A website that uses Google Analytics wants to know the percentage of visitors that do
not interact with the website. Which metric should be used?
A. Page per sessions
B. Pageviews
100 points: Part 1 (60 points Quiz) + Part 2 (40 points Peer-Corrected)
Part 1 (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
Explanation: Week 7, Video 3, Slide 13
Q.2 What does CPM stand for?
a. Cost Per Million
b. Cost Per Thousand
c. Counts Per Hundred
d. None of the Above
Explanation: CPM = Cost Per Mille = Cost Per Thousand
Q.3 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
Explanation: Statement A is correct.
B) Average Session Duration defines how long, on average, visitors are staying on the
website.
C) A session starts right away when someone loads a page and ends after 30 minutes of
inactivity.
D) A high Bounce Rate generally indicates that the website entrance pages are not relevant
to the website’s visitors.
Q.4 A company is doing an ad campaign where the details of the ad are presented below.
, (Assume that a customer would purchase twice in his/her life-time upon watching the
advertisement once)
Metric Value
Avg CPC (Cost per click) $1.05
Conversion Rate 7%
Avg.Sale Value $80
Profit Margin 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
Solution: 32*0.07 = 2.24
PPC Conversion cost = $1.05/0.07 = 15
Profit Margin per sale = $80*0.2 = 16
Profit Margin per customer over lifetime (excluding advertisement costs) = 32
Total profit per customer = 32 – 15 = 17
For break even the cost = 32*0.07 = 2.24
Q.5 The objective of Conversion Rate Optimization (CRO) is to:
A. Increase number of website visitors
B. Increase website sales
C. Enhance engagement
D. All the above
Answer: D
Explanation: From the slides, we learnt that Conversion rate optimization (CRO) is the
systematic process of increasing the percentage of website visitors who take a desired
action. Desired actions are different based on website goals. So above choices are general
goals of all websites, and they are CRO goals.
Q.6 A website that uses Google Analytics wants to know the percentage of visitors that do
not interact with the website. Which metric should be used?
A. Page per sessions
B. Pageviews
