How would you prove the effectiveness of acquiring new merchants on Facebook vs. Instagram?
Question Explain
This question is asking you to display your understanding of social media marketing, particularly on Facebook and Instagram. In addition, it is asking you to showcase your analytical skills and how you can use data to measure success and effectiveness. To answer this, you must address how one could develop a methodology for proving the effectiveness of merchant acquisition on the two platforms. It might be useful to discuss potential metrics you could use to measure the success, such as conversion rate, click-through rate, customer lifetime value among others. It is crucial to also demonstrate your understanding of potential differences between Facebook and Instagram as platforms.
Answer Example 1
To compare the effectiveness of acquiring new merchants on Facebook versus Instagram, we need to consider a variety of metrics. For instance, we could start with the number of leads acquired from Ads on both platforms within similar investment. Consider user engagement, such as shares, likes, comments, and click-through rates that lead to a conversion, for example, signing up for a service or a purchase. Then we could calculate the acquisition cost per merchant on both platforms. We might also want to consider the quality of these leads, perhaps by the lifetime value of these merchants. If possible, we could also compare differences between the user demographics on both platforms to ensure our marketing was optimized based on user behavior and preferences on each platform.
Answer Example 2
From the outset, we need to be clear on the goals for acquiring the new merchants. Assuming the goal is to drive more sales, we will be looking out for metrics related to sales conversion. We could then proceed to run a campaign on both Facebook and Instagram independently within the same period. Upon termination, we would gather and analyze the data on key performance indicators like cost per click, cost per acquisition, click-through rate and conversion rate, and the overall return on ad spend. To quantify the quality of merchants acquired, we might examine their customer lifetime value or their sales volume within a specific timeframe. Lastly, it would be useful to get some insights from the merchants about their experiences, preferences, and the reason they chose to engage our company, this would provide an avenue for qualitative analysis. Regardless of the result, we would be looking to optimize our acquisition strategy in line with the insights obtained.
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