Maximising Marketing ROI with a Fixed Budget

{"problem":"You have a marketing budget of $10,000. Channel A costs $1,000 per campaign and has an expected return of $3,000. Channel B costs $2,000 per campaign and has an expected return of $5,000. How should you allocate the budget to maximise returns?","pitfall":"A novice might anchor on the total budget and spread it evenly across channels, ignoring the varying ROIs. This leads to suboptimal returns because not all campaigns provide the same value.","steps":[{"label":"Step 1: Calculate ROI for Each Channel","calculation":"ROI_A = (3000 - 1000) / 1000 = 2.0 \nROI_B = (5000 - 2000) / 2000 = 1.5","annotation":"Calculating ROI helps compare the effectiveness…

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