In this video I walk you through an easy-to-use DFY template for creating profit curve/response curves. You simply have to dump the data for Ad Spend, MER and Contribution Margin and it give you the plot as to how profit, MER and revenue vary with changing ad spends. Strictly speaking, this is not really a response curve but just a profit curve, because it does not do any modeling. A response curve can use many different kinds of models but in this video I have used the most commonly used one - the Sigmoid/Logit curve. Using the concepts of saturation/half life, I show how the response curve is able to predict the future.
Get the GSheets template:
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More info on Response curve (external resource - really nice article):
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Check out my other 1-click tools/apps in this playlist:
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#marketinganalytics #forecasting #predictivemodeling
