Question

Your company has decided to embark on a Facebook Ad Campaign. You know that the ad itself will cost $10,000/month and you plan to run it for 6 months.

You want to go beyond the basic cost of $60,000 for the ad and include the time investment that your department and other department will incur. Here are your estimates of time:

Management (you): 15 hours to work with designers to imagine, create, and approve the ad. In addition, you will spend 1 hour/week monitoring the progress of the ad, and an additional 5 hours at the end of the campaign to evaluate the results.

Creative Designers: One designer @ 20 hours to design and edit according to your direction. One designer @ 10 hours to set up the landing page for respondents to fill out information (includes design and edits).

IT: 4 hours for one IT specialist to set the ad up according to your parameters (i.e. set up links to appropriate landing pages, gather email addresses, etc.)

Marketing specialists: One specialist @ 5 hours/week to monitor responses, report on activity.

Salaries:

Management (you): $90,000/year

Creative Designer: $45,000/year

IT Specialist: $50,000/year

Marketing Specialist: $50,000/year

Calculate the time investment based on how much time each employee will spend on the project and apply their salary percentages. Remember that some calculations will be a one-time only expense (i.e. Creative Designer’s 20 hours to create the ad), while other expenses will be performed weekly for 6 months (i.e. Marketing Specialist’s time).

Now add the time investment to the cost of the ad campaign on Facebook. What is the total cost of the campaign?

You track the campaign results and find that it has produced 12 new customers that each bought products/services totaling $8,500 each. What is the total amount that the campaign brought in?

Now calculate the ROI of this campaign. Remember that the formula for ROI is:

Gain of investment – Cost of Investment

               Cost of Investment

Answer 1

Working Hours			Time Investment by each person				Salary Distrbution over the period of time
Management			Management	46/2080*100	2.21%		Management	90000*2.21%	1989
Fixed	20
Variable	1*26=26 hrs
Total	46
Creative Designer	20+10		Creative Designer	30/2080*100	1.44%		Creative Designer	45000*1.44%	648
Total	30 hrs
IT	4 hrs		IT	4/2080*100	0.19%		IT	50000*.19%	95
Marketing	5*26		Marketing	130/2080*100	6.25%		Marketing	50000*6.25%	3125
Total	130 hrs
Net Total	210						Net Total		5857
		Total Cost of Campaign=	Basic cost+salary distribution
		=	(10000*6)+5857
		=	65857
Total Amount Campaign Bought In =		8500*12
	=	102000
Gain On Investment	=	(Total Income- Cost of Investment)	=	102000-65857	=	36143
Now Calcuation of ROI
	Gain on Investment-Cost of Investement		=	36143		=	54.88%
	Cost Of Investment			65857
Assumption:
1. There are 5 working days in a week with 8 hours working each day and 52 weeks in a year so the total yearly working hours turn out to be 2080 hr
2. Total of 26 weeks in 6 months