Corveta Motors: Where Should the Acquisition Budget Go?
Marketing
easy40 min0 submissionsRazorpay
Scenario
Corveta Motors is a mature-stage automotive business in Europe. The CMO has €137 M of annual acquisition budget and has been asked to justify next year's plan.
Last year's spend and results:
| Channel | Spend | New customers | Cost per acquisition |
|---|---|---|---|
| Paid search — non-brand | €59 M | 2,358 | €25021 |
| Paid search — brand | €9 M | 3,476 | €2589 |
| Paid social | €56 M | 1,956 | €28630 |
| Affiliates & retargeting | €13 M | 1,366 | €9517 |
Unit economics:
- Average revenue per user: €904 per month
- Gross margin: 60%
- Monthly churn: 2.9%
The board has asked for a 26% increase in new customers next year without an increase in budget. The CMO's instinct is to move money into brand search, which shows by far the lowest cost per acquisition.
Supporting data
channels
| spend | channel | new customers |
|---|---|---|
| 59 | Paid search — non-brand | 2358 |
| 9 | Paid search — brand | 3476 |
| 56 | Paid social | 1956 |
| 13 | Affiliates & retargeting | 1366 |
derived hints
- ltv
- 18703
- blended cac
- 14963
- customer lifetime months
- 34.5
unit economics
- arpu monthly
- 904
- gross margin pct
- 60
- monthly churn pct
- 2.9
Your task
Recommend an allocation. Your answer should provide:
- Analysis — the unit economics and each channel's true efficiency, computed rather than described.
- Risks — what your reallocation depends on, and what would change your mind.
- Recommendation — a specific budget shift, and how you would prove it works before committing fully.
State any assumptions you make.
Ready to move forward? Up next: Pallas Pharma: Where Should the Acquisition Budget Go?Next question
How you'll be graded
100 points, 60% to pass.
- recommendation20
- channel judgement25
- problem structuring25
- quantitative analysis30
Hint
Reveal suggested structure
LTV and payback; per-channel CAC; incrementality of brand and retargeting; test-and-scale allocation