8 - Measure Marketing Performance

Question 1

instrumental variables

Answer 1

filter good price variation

• good variation is then independent of other demand factors
• requires highly skilled economists

Question 2

price experiment

Answer 2

have good price variation

• costly
• counter managerial incentives
• price movement is not correlated with other demand factors

Question 3

two main causal approaches

Answer 3

experimental + instrumental variables

Question 4

case summary: rocketfuel

Answer 4

• high conversion rate does not mean advertising is effective
• not using an experiment will overestimate ROI
• control groups are expensive but worth it
• experimental design is hard + delicate