Although the marketing budget is substantially large, it is forecasted to vary through the first year. From
the first quarter, it will increase linearly. This is to reflect the learning curve that is acquired to make
campaigns more profitable. That is, the company does not want to rapidly invest in marketing campaigns
to only immediately learn from them and have substantially better conversion metrics shortly after.
Therefore, it will slowly learn how to improve campaigns in the first quarter and increase the budget. It
will then slightly decline after the third quarter to assess the efficiency and conduct research into the
performance to optimize it once more and increase towards the fiscal year end Dec. 31 to meet the holiday
shopping demand with special promotions.
The total spends on the marketing budget for the first year is #351K. This is expected to yield $853K of
operating revenues with the no-product model be counted as affiliate revenues with no cost of goods sold
The marketing budget then increases by 5% annually until year four, with revenues growing at 20% in year
two and slowing to market growth at 17% thereafter to reflect saturation in the market and the more
competitive bidding creating less consumer surplus that was a factor into the substantial growth during
the start-up phases. season (Accenture, 2
MONTHLY MARKETING SPEND