Like math? You better learn to.
- Thread starter Mike
- Start date
Awesome thread Mike and really appreciate the xls.
Anyone else have worksheets they use for calculations?
Anyone else have worksheets they use for calculations?
Since I posted that original XLS spreadsheet, I've made a slight change to the CPM column by adding "Country".
"Country" on my spreadsheet is the percentage of traffic that comes from countries that I can theoretically convert. So, if I've got an offer that is US only, then I need to know what percent of their traffic is US. Obviously, if you are targeting US only then the percent is 100% (duh), but a lot of sites you'll find can't geotarget traffic for you, so then you'll need to enter the percent of traffic you can actually convert.
Also, I added "Off Page CTR" and changed the conversion rate so that it's based on the clicks off page, and not total clicks.
Just play around with it, you'll figure it out.
View attachment cpc-calculator.zip
"Country" on my spreadsheet is the percentage of traffic that comes from countries that I can theoretically convert. So, if I've got an offer that is US only, then I need to know what percent of their traffic is US. Obviously, if you are targeting US only then the percent is 100% (duh), but a lot of sites you'll find can't geotarget traffic for you, so then you'll need to enter the percent of traffic you can actually convert.
Also, I added "Off Page CTR" and changed the conversion rate so that it's based on the clicks off page, and not total clicks.
Just play around with it, you'll figure it out.
View attachment cpc-calculator.zip
I'll answer from just reading the 1st post, cos I know the rest of the thread will be filled with the answers...
You make 80 cents per click, so:
A: $1000
B: $2000
C: Take it if the CTR for the banner is > then 0.25
I'll leave this here with no edits. If I screwed it up, I figure who gives a shit. At least I had a go. My poor calculator, hehe
You make 80 cents per click, so:
A: $1000
B: $2000
C: Take it if the CTR for the banner is > then 0.25
I'll leave this here with no edits. If I screwed it up, I figure who gives a shit. At least I had a go. My poor calculator, hehe
Okai folks! It has been a long time now since there has been some work here; time for a new batch of assignments. I will add more soon, hopefully 
If you haven't done the previous assignments I posted, you should go back and practice on them. Solution proposals have been posted in this thread.
As for the new assignments, assignment 6 is very easy while assignment 7 requires some more work.
Assignment 6
You buy a computer for $1500 and do not use it for a year. Assume that you can and do sell it for $1500 after that year.
Question 1: What did the computer cost you?
Now, forget the computer.
Question 2: Generally, in your decision making, should you care about absolute or relative prices?
Assignment 7
You are interested in a new niche you are wondering about Internet marketing a product in. Assume that the product's a priori probability for high demand (H) is 0.4. There is only high (H) and low (L) demand. You want to test the niche by PPC. The testing will give you an indication 'g' if the signal is good, and 'b' if the signal is bad. From your previous experience in testing new products in similar niches, the probability of a good indication is 60% given high demand, while the probability of a bad signal given low demand is 90%. Assume these measures are representable here too. If you decide to market the product you will have a 35 000 profits if there is high demand, and 5 000 profits if there is low demand. If you do not proceed in marketing the product your profits are 15 000 from other marketing activites, independent of the demand state for the product in question. Assume that you are risk neutral, i.e. you only care about expected profits. How much should you spend on testing the product in the niche?
If you haven't done the previous assignments I posted, you should go back and practice on them. Solution proposals have been posted in this thread.As for the new assignments, assignment 6 is very easy while assignment 7 requires some more work.
Assignment 6
You buy a computer for $1500 and do not use it for a year. Assume that you can and do sell it for $1500 after that year.
Question 1: What did the computer cost you?
Now, forget the computer.
Question 2: Generally, in your decision making, should you care about absolute or relative prices?
Assignment 7
You are interested in a new niche you are wondering about Internet marketing a product in. Assume that the product's a priori probability for high demand (H) is 0.4. There is only high (H) and low (L) demand. You want to test the niche by PPC. The testing will give you an indication 'g' if the signal is good, and 'b' if the signal is bad. From your previous experience in testing new products in similar niches, the probability of a good indication is 60% given high demand, while the probability of a bad signal given low demand is 90%. Assume these measures are representable here too. If you decide to market the product you will have a 35 000 profits if there is high demand, and 5 000 profits if there is low demand. If you do not proceed in marketing the product your profits are 15 000 from other marketing activites, independent of the demand state for the product in question. Assume that you are risk neutral, i.e. you only care about expected profits. How much should you spend on testing the product in the niche?
Inflation Rate, so if inflation is 3% I would lose $45
Totally depends on the lifespan of your project and the item. Also if you are thinking about selling said item after you use it or not. In general electronics have issues with resale value...
I tend to go with absolute price. And if it matters I weigh it by projected ROI % - 30 (because I always tend to overestimate)
Working on this one...
Good. I understand it so that you by inflation refer to a general price increase. I don't define inflation as such, but that's what you meant, so it's good. But such a general price increase is only part of the actual costs during that year. The general idea is to consider relevant alternative costs, one of which you mentioned.
Price - Wikipedia, the free encyclopedia
Basically what matters are the relative prices. It is not interesting in itself if a computer costs $1000 or $2000, but what the price ratios to prices of other commodities are. A cell phone for $10 000 may sound pretty expensive, but that is assuming that you are facing prices of other goods similar to those today. If the prices of all other goods were given a large shift upwards, then those $10 000 would start to look like a better offer.
There's a lot more advanced math that you can apply to affiliate marketing, too. If you're good with statistical analysis and calculus, there's methods for it. I'll see what I can come up with to post here for more info.
I love math
I love math