You are analyzing your advertising expenses. You have a print ad in the Apartment

Question

Guide rental magazine that costs $900 per month. You also have an ad on the
apartments website that costs $224 per month. You have tracked your call,
show and lease traffic and have determined that you conducted six shows and
rented to three residents who stated they saw you first in Apartment Guide. You also
had ten e-mails and three follow-up shows, renting to two of these prospects, who
came from the apartments website.

Answer 1

To analyze the effectiveness of your advertising expenses, we'll break down the costs and the results for each ad, determining how much each ad is costing you per lease generated.

Advertising Costs:

1. Apartment Guide Ad:

   • Monthly Cost: $900
   • Number of Leases: 3

2. Apartments Website Ad:

   • Monthly Cost: $224
   • Number of Leases: 2

Cost per Lease Calculation:

1. Apartment Guide Ad Cost per Lease: \[ \text{Cost per Lease} = \frac{\text{Cost of Ad}}{\text{Number of Leases}} = \frac{900}{3} = 300 \] So, the cost per lease from the Apartment Guide is $300.

2. Apartments Website Ad Cost per Lease: \[ \text{Cost per Lease} = \frac{\text{Cost of Ad}}{\text{Number of Leases}} = \frac{224}{2} = 112 \] So, the cost per lease from the Apartments website is $112.

Summary of Findings:

• Apartment Guide Ad:

  • Cost: $900/month
  • Leases Generated: 3
  • Cost per Lease: $300

• Apartments Website Ad:

  • Cost: $224/month
  • Leases Generated: 2
  • Cost per Lease: $112

Conclusion:

The Apartments website ad has a significantly lower cost per lease ($112) compared to the Apartment Guide ad ($300). This indicates that the Apartments website ad is a more cost-effective advertising channel in terms of generating leases.

Recommendations:

• Consider reallocating some of your advertising budget to the Apartments website, as it offers a better return on investment.
• Continue to monitor both advertising channels to see if their effectiveness changes over time, and adjust your strategy accordingly.