Solution to Contest #15

First, we take a look at what the questions is asking for.

Which campaign is most effective for Dave, based on a cost per 1000 impressions?

Note that the question did not ask for cost per click.

Next we calculate the cost per 1000 impressions for Campaign #1.

$31.00 / 40,134 x 1000 = $0.772 per thousand impressions.

Next, we do some calculations for Campaign #2. We must think a little to use the information relating to "clicks" appropriately.

Cost = $31.00 x 2.1 = $63.00

Clicks = 158

Click Through Rate = 0.92% = 0.0092

Impressions = 158/0.0092=17,174

Cost per 1000 impressions = $63.00 / 17,174 x 1000 = $3.67 per thousand impressions.

Next, we do some calculations for Campaign #3. 

Cost = $31.00 - $12.25 = $18.75

Clicks = 158 * (1-0.115) = 140

Click Through Rate = 0.92% + 0.54% = 1.46% = 0.0146

Impressions = 140/0.0146 = 9,589

Cost per 1000 impressions = $18.75 / 9,589 x 1000 = $1.96 per thousand impressions. 

Campaign #1 is the most effective campaign, based on cost per thousand impressions.