# Big Skinny

Submitted By Moriya
Words 1902
Pages 8

We believe that Big Skinny should continue to advertise via sponsored search ads. Based upon the Cost per Click model presented to us in Exhibit 4 in the case study, the numbers show that they are able to generate a fair amount of revenue.

If we evaluate the data within Big Skinny’s CPC model, we can determine the cost and revenue as follows -

Cost = Impressions x CTR x CPC
Cost = 42,986 x 4.8% x .54
Cost = \$1,114.20

Revenue = Impressions x CTR x Conversion Rate x Revenue Per Conversion**
Revenue = 42,986 x 4.8% x .05 x \$20 Revenue = \$2,063.40

** The value of \$20 for Revenue Per Conversion is being assumed for this exercise. For one, CEO Kiril Alexandrov is quoted as saying “for \$20, your wallet will be that thin forever” in the case study. Additionally, after searching their website, the vast majority of wallets listed on their website are being sold for more than \$20. Therefore, \$20 is used as a bare minimum price for each wallet sold. Even with that in mind, you can see that the revenue is almost double that of the cost. Taking into consideration that a certain number of the wallet sales will most likely be more than \$20, the revenue will be larger in reality. This proves that their sponsored search advertising campaign is generating revenue. With that said, we can’t confirm that it is profitable since we weren’t provided with cost of manufacturing and distributing the product.

One keyword that Big Skinny might want to decrease their bid on is “leather wallet.” Although they have 12,335 impressions and 103 clicks, their CPC is \$20.26. If you compare that CPC with all of the others, the next most expensive CPC is almost half of the price at \$10.53. Also, they don’t sell leather wallets. They do sell leather hybrid wallets, but their core wallet is not made of leather. By using the “leather wallet” keyword search,...

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...Sponsored Search Strategy We believe that Big Skinny should continue to advertise via sponsored search ads. Based upon the Cost per Click model presented to us in Exhibit 4 in the case study, the numbers show that they are able to generate a fair amount of revenue. If we evaluate the data within Big Skinny’s CPC model, we can determine the cost and revenue as follows - Cost = Impressions x CTR x CPC Cost = 42,986 x 4.8% x .54 Cost = \$1,114.20 Revenue = Impressions x CTR x Conversion Rate x Revenue Per Conversion** Revenue = 42,986 x 4.8% x .05 x \$20 Revenue = \$2,063.40 ** The value of \$20 for Revenue Per Conversion is being assumed for this exercise. For one, CEO Kiril Alexandrov is quoted as saying “for \$20, your wallet will be that thin forever” in the case study. Additionally, after searching their website, the vast majority of wallets listed on their website are being sold for more than \$20. Therefore, \$20 is used as a bare minimum price for each wallet sold. Even with that in mind, you can see that the revenue is almost double that of the cost. Taking into consideration that a certain number of the wallet sales will most likely be more than \$20, the revenue will be larger in reality. This proves that their sponsored search advertising campaign is generating revenue. With that said, we can’t confirm that it is profitable since we weren’t......

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...Summary In 2010, Big Skinny CEO Kiril Alexandrov was looking to transcend from retail distribution and print advertising to the world of online marketing to achieve maximum growth. The retail sales pitch was an easy one, as Alexandrov focused on the value of the wallet and the impulsiveness of consumers (Benjamin & Kominers, 2012). Unfortunately, translating this type of sales pitch was much harder to do in the world of cyberspace. Big Skinny centered their online marketing efforts around display Ads, keyword searches, social media and relationships with online distributors and deep discounted sites such as Amazon and Groupon respectively. The expansion caused much hardship, as Big Skinny received negative feedback on the review website Yelp that stemmed from their Groupon experiment. They also faced a glitch in their online promotion that allowed 4,000 people to order free wallets from their online store. Big Skinny needs to refocus their online marketing strategy by getting rid of display Ads, refining keyword searches and severing ties with deep discounted sites. Big Skinny can create value for their product and manage their orders better by being more selective with who distributes their product and by keeping the price steady. A more seasonal approach surrounding keyword searches can create new revenue from those who are looking to make quick and impulsive purchases. Lastly, by being responsible for who distributes their products, Big Skinny can......

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#### Online Marketing at Big Skinny

...Big Skinny is a company that manufactures wallets with brand Big Skinny. Big Skinny wallets are made from synthetic material unlike conventional wallets that are made from leather. These wallets are very light in weight and the have captured good market. Till now Big Skinny is selling wallets through trade fares and other physical outlets but Kiril, the CEO of Big Skinny, is contemplating the online medium to capture further market. Wallets: Wallets are generally preferred with lightweight and that can easily carry stuff like credit cards, cash and receipts along with other stuff. Thin wallets are considered better because it will always keep you safe from back pain and sciatica. Wallets are often in need of replacement and people buy them as impulse purchase or as gifts since it is not a costly item and also does not require much information processing. Big Skinny has just launched world’s thinnest wallet and got good response from the market during various trade fairs it participate in. The challenge is how to use online medium to build further sales and formulate an strategy for online retail and marketing. The key features of this wallet are:- 1. Size - Reduce Wallet size by 50 to 75% 2. Weight - Will weigh under an ounce. 3. Card Pocket size - Will feature extra wide pocket 4. Slipperiness of the interior - they are lined with rubber coating which Keep gravity. 5. Lack of versatility - They are water resistant and tough enough even for......

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