Updated: Oct 28, 2021
Purple Marketing Company recently launched a campaign for Thai Orchid, a Thai restaurant near Kansas City. The campaign’s action point was to incentivize customers to utilize the restaurants carry-out and or delivery services by offering a 10% discount off the entire order. If customers used a specific promotion code, they would receive the discount; this promotional method also allowed PMC to track the actual revenue generated from the strategy.
This campaign ran from August 1st-August 15th and was meant to test the effectiveness and increase the use of the delivery and carry-out services in a post-covid society. Also this would give PMC a chance to verify the return on investment Thai Orchid was receiving was profitable.
We generated from our data analytics that the promotion code prompted 17 uses, 1 from Facebook and 16 from a Google ad. This meant that a total of $82.14 was discounted in a 15-day period. The calculation Purple Marketing uses to calculate the Return on Investment is:
Because we know that ads like this tend to cannibalize existing traffic, we had to counteract it by looking at how many organic visits were lost during this promotion. In the image above, we see the estimated ad revenue achieving roughly $5,870 in revenue while $4,400 was lost in organic (SEO) revenue. The difference can be viewed as the true ROI of the ads for this period, $1,470. The ads over the 15-day period created a proven $760 in revenue.
Since the ad spend was $300 in total, and the ROI was $760, this is what we can call a great return on investment! Plus, we helped Thai Orchid generate new customers into their customer base, which will mean even more profits in the long run!
By Andrea Wolf, Staff Copywriter