Analyzing Relationship Between Cost per Click and Number of Clicks

This report analyzes the relationship between cost per click (CPC) and number of clicks in the context of a board game boutique. It provides insights on the impact of CPC on attracting customers and profitability. The report also recommends the best actions for the boutique, including the use of a marketing company and a specific cost per click strategy.

Business

TABLE OF CONTENTS
INTRODUCTION ..........................................................................................................................3
a. Analyzing relationship between the cost per click and number of clicks................................3
b. Assessing cost per click which Alison and Toby should use...................................................6
c. Calculating CPC if entrepreneurs use marketing company.....................................................8
d. Recommending the best actions for Board Game Boutique..................................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
In the current times, companies are placing emphasis on employing marketing tools and
techniques with the motive to entice both customer base as well as profitability. The present
report is based on the case scenario of A Board game boutique which known for delivering good
services. Business unit is providing customers with wide range of games option at affordable
prices. In this, report will provide deeper insight about the extent to which cost per click (CPC)
influences from numbers. Further, it will also assist entrepreneurs in relation to taking decision
with regard to including marketing company or not.
a. Analyzing relationship between the cost per click and number of clicks
Days Cost per click (in £) Number of clicks
1 0.75 181
2 0.30 101
3 1.00 247
4 0.75 214
5 0.50 167
6 0.20 59
7 0.35 137
8 0.55 142
9 0.95 240
10 0.20 67
11 0.85 263
12 0.50 123
13 0.45 134
14 0.50 147
15 0.65 198
16 0.30 74
17 0.70 189
18 1.00 287
19 0.65 205
20 0.25 91
21 0.90 262
22 1.00 294
23 0.95 247

24 0.15 45
25 0.90 231
26 0.75 227
27 0.40 132
28 0.60 185
29 0.35 104
30 0.80 206
Descriptive statistics
Particulars Cost per click (£) Number of clicks
Mean 0.606667 173.3
Standard Error 0.049523 12.95511
Median 0.625 183
Mode 0.75 247
Standard Deviation 0.271247 70.95805
Sample Variance 0.073575 5035.045
Kurtosis -1.26679 -1.01611
Skewness -0.06976 -0.12012
Range 0.85 249
Minimum 0.15 45
Maximum 1 294
Sum 18.2 5199
Count 30 30

Outcome of descriptive statistics shows that average CPC during the period of 30 days
was 60p when mean clicks imply for 173 respectively. Along with this, number of clicks done by
50% people were 183. Case scenario presents that company’s motive is to get 200 clicks every
day that so that large number of customers can be attracted. However, there is a high risk in
relation to deviating CPC and NOC from mean figures. Thus, business unit is required to take
significant measure so that target can be attained.
Regression analysis
Null hypothesis (H0): There is no statistically significant association between cost per click and
number of clicks.
Alternative hypothesis (H1): There is a statistically significant association between cost per click
and number of clicks.
Regression Statistics
Multiple R 0.970391
R Square 0.941659
Adjusted R
Square 0.939575
Standard Error 0.066676
Observations 30
ANOVA
df SS MS F Significance F
Regression 1 2.009186 2.009186 451.9349 8.13E-19
Residual 28 0.124481 0.004446

Total 29 2.133667
Coefficie
nts
Standa
rd
Error t Stat
P-
value
Lower
95%
Upper
95%
Lower
95.0%
Upper
95.0%
Intercept -0.03618
0.03259
8
-
1.1099
3
0.2764
73
-
0.1029
5
0.0305
92
-
0.1029
5
0.03059
2
Number of
clicks 0.003709
0.00017
4
21.258
76
8.13E-
19
0.0033
52
0.0040
67
0.0033
52
0.00406
7
Interpretation: By applying statistical tool on data set it has identified that both the
variables such as CPC and number of clicks are highly correlated. The above depicted table
clearly exhibits that value of R and r square accounts for .97 & .94 respectively. Referring this, it
can be stated that CPC will be affected significantly when changes take place in independent
variable. Further, ANOVA table entails that P<0.05, accordingly alternative hypothesis accepted
and other one rejected.
b. Assessing cost per click which Alison and Toby should use
Days
Cost
per
click
(in £)
Number
of clicks
When
variable
cost
charged:
Amount
(in £)
when
cost is
75 p:
Amount
1 0.75 181 136 136
2 0.30 101 30 76

3 1.00 247 247 185
4 0.75 214 161 161
5 0.50 167 84 125
6 0.20 59 12 44
7 0.35 137 48 103
8 0.55 142 78 107
9 0.95 240 228 180
10 0.20 67 13 50
11 0.85 263 224 197
12 0.50 123 62 92
13 0.45 134 60 101
14 0.50 147 74 110
15 0.65 198 129 149
16 0.30 74 22 56
17 0.70 189 132 142
18 1.00 287 287 215
19 0.65 205 133 154
20 0.25 91 23 68
21 0.90 262 236 197
22 1.00 294 294 221
23 0.95 247 235 185
24 0.15 45 7 34
25 0.90 231 208 173
26 0.75 227 170 170
27 0.40 132 53 99
28 0.60 185 111 139
29 0.35 104 36 78
30 0.80 208 165 155
Total 3696 3899
Through analysis, it has found that when total cost would be higher when business unit
pays 75p for each click. On the other side, in the case of variable changes cost is 3696.
Therefore, there is not a high differences between both clicks i.e. only 203. Thus, it is depend
upon the company's financial position such that most of the firm uses such advertising in order to
enhance the brand image and attract customer, whereas many of them do not use such
advertising because the cost per month is quite higher.

In the same way, if Board Game Boutique uses 75p per click then it can be a good option
because the difference between both clicks is quite low so it is recommended to use 75p per
click. Also, investing amount on pay per click will also help customers to reach its own website
and it can be a good value for money as well. On the other side, Christina, Fenni and Roselina
(2019) supported that PPC assists company to test and track the customers. Along with this, this
tool also allow quoted company to run real-time comparison test to analyses the differences in
advertisement effects through users click. Thus, it is considered a good option for a business as it
allows firm to reach large audience and build goodwill as well.
c. Calculating CPC if entrepreneurs use marketing company
Days
Cost per
click (in £)
Number of
clicks
when cost is
15 p: Amount
when cost is 25
p: Amount
when cost
is 75 p:
Amount
1 0.75 181 27.15 45.25 136
2 0.3 101 15.15 25.25 76
3 1 247 37.05 61.75 185
4 0.75 214 32.1 53.5 161
5 0.5 167 25.05 41.75 125
6 0.2 59 8.85 14.75 44
7 0.35 137 20.55 34.25 103
8 0.55 142 21.3 35.5 107
9 0.95 240 36 60 180
10 0.2 67 10.05 16.75 50

11 0.85 263 39.45 65.75 197
12 0.5 123 18.45 30.75 92
13 0.45 134 20.1 33.5 101
14 0.5 147 22.05 36.75 110
15 0.65 198 29.7 49.5 149
16 0.3 74 11.1 18.5 56
17 0.7 189 28.35 47.25 142
18 1 287 43.05 71.75 215
19 0.65 205 30.75 51.25 154
20 0.25 91 13.65 22.75 68
21 0.9 262 39.3 65.5 197
22 1 294 44.1 73.5 221
23 0.95 247 37.05 61.75 185
24 0.15 45 6.75 11.25 34
25 0.9 231 34.65 57.75 173
26 0.75 227 34.05 56.75 170
27 0.4 132 19.8 33 99
28 0.6 185 27.75 46.25 139

29 0.35 104 15.6 26 78
30 0.8 208 31.2 52 155
Total 780.15 1300.25 3899
Marketing cost
annually (£1000) 12000 12000 12000
Total 12780.15 13300.25 15899
In accordance with the above table it has been interpreted that company should pay
around £15899 yearly. Under this, company also consider 75 p per click in which company has
to pay monthly 1000 additionally. On the other side, if the company charges in accordance with
15 p then the cost will be 12780 and for 25 p it will be 1330.25 respectively. Therefore, it is
recommended to the company to use 75p per click, as it helps to sustain the brand image and
grab attention of many customers towards it.
It is beneficial for the company only if the company is ready to bear additional charges,
as from last three year, company's performance is good and also gain good reviews by
competitive pricing. Paying such amount to marketing company will help a business to grab
attention of many customers towards it. Further, working with marketing company also helps a
business to generate quantifiable results that benefits business in terms of sales (Bhandari,
2017). On the critically note, it is also analyse that if company do not use any marketing
company, then it did not reach to large population. Therefore, using marketing company will be
beneficial for Board Game Boutique instead of using variable cost.
d. Recommending the best actions for Board Game Boutique
Through the analysis it is examined that company should use marketing company and
also use pay per click as a marketing strategy so that it will help to keep payroll cost down.

Moreover, there are many suggestions which a firm should consider, some of them are as
mentioned below:
 It is to be suggested to the company that it take help from marketing company because
they have experts who assist business to make better decision and increases sales as well
(Kundu, 2021). In addition to this, work with experts will also helps quoted business to
cope up with any issues and sustain the brand image as well.
 Moreover, it is also recommended to Allison and Toby to considered 75p per click
strategy and if the sales of a business will increase, then company may decrease cost per
click by 5p so that it will be balanced the sales and extra costing incurred by company
while using marketing company.
 Pricing factor should also be considered by the company, such that as per the fluctuation
in market, company must change the price of products so that customer may afford. It is
so because if price will be increased then customers are not ready to buy products and
shift towards another brand. This, in turn cause negative impact upon brand image of a
firm.
 Before hiring any marketing company, it is also suggested to the firm to consider the
rates of other agencies along with their working performance (Kaur and Wadera, 2018).
This in turn helps Allison and Toby to invest low amount that provide greater output.
Additionally, it is also examined that this tool helps to communicate the value to
customers and enhanced sales as well.
CONCLUSION
By summing up above report it has been concluded that there is a strong relationship
between cost per clicks and number of click and that is why, if clicks increases then cost
increases. Therefore, investing ion PPC is more beneficial for the company in order to gran
attention of customers. Further, study also summarized that 75p per click is also beneficial
because there is low difference between variable charges and amount. Also, this assist business
to raise the brand image and gain trust among customers so that sales of a business ill increased.

REFERENCES
Books and Journals
Bhandari, R. S., 2017. Pay Per Click Marketing Strategies: A Review of Empirical Evidence. The
Journal of Industrial Distribution & Business. 8(6). pp.7-16.
Christina, I. D., Fenni, F. and Roselina, D., 2019. Digital marketing strategy in promoting
product. Management And Entrepreneurship: Trends Of Development. 4(10). pp.58-66.
Kaur, J. and Wadera, D., 2018. Affiliate Marketing Strategy of Amazon India. In Driving Traffic
and Customer Activity Through Affiliate Marketing (pp. 33-50). IGI Global.
Kundu, S., 2021. Digital Marketing Trends and Prospects: Develop an effective Digital
Marketing strategy with SEO, SEM, PPC, Digital Display Ads & Email Marketing
techniques.(English Edition). BPB Publications.