I realize that she was under some pretty severe stress, but a marketing manager that thinks gmail earns ~$70,000 a day? Or that each user will click on seven ads a day?
“Google places four ads per e-mail opened in Gmail. Advertisers get to pick their click-through rates, which can be as little as $0.05...Say each G-mail user opens seven new e-mails a day. They would see 28 ads. If they click on ¼ of those ads, then only seven ads are clicked."
Gmail probably has something like 150 million users, so her figure of 7 ads clicked per user at a minimum of 5 cents a click would result in 52.5 million dollars a day. At some point she should have realized the void between her new analysis and her original $70,000 guess. The whole point of the question is to examine your analytical and estimation skills. The fact that she didn't notice that she was moving towards and answer 750 times the size of the her last one says a lot.
What surprises me is the reasoning path she took (ie estimating customer behavior). I'd have tried to guess how many servers they need for that (uuuuh...100,000?) and how much they cost a year ($1000 each, $100m?) and what's an acceptable profit margin (20%? So about $300,000/day in earnings).
Then again you could figure Google makes about $5 billion a year in profit, say a tenth of that comes from gmail, and the profit margin is 10%, suggesting ~$15m a day in earnings (not profits) which is off by a factor of 500 from the above. That sounds a lot more likely.
To be honest, I think the approach she took is a lot more reasonable. The whole point of building a product business is that your revenue scales differently from your expenses. Your example has an implicit assumption that Google is somehow artificially regulating demand so they can keep their profit margin at 20%. The profit margin on Gmail could be 5% or 99%. Who knows?
No argument here. The only reason I went down this road was because I figured any guesses I made about actual click rates of users would be mostly based on a sample of 1 and thus even more laughably off than guessing the minimum viable earnings...of course, this is why one should never be ashamed to say you don't know. It's one thing to speculate and exhibit your thinking process, but when you start getting confident about it it's all too easy to slip in bullshit artistry, and I'm sure they'd rather avoid that trait in hiring.
From the Googler: “You lost me at the ‘only clicking on ¼ of the ads’ comment. Let’s move on.”
Yes, indeed. Someone who has a slightest clue about the whole stuff just can't say 1/4 of users will click an ad in Gmail. I am sorry for her, but that is just so off...
I know it's anecdotal, but I've never clicked on an ad in gmail. (to be fair she said that all users will click on 1/4 of the ads presented to them, not '1/4 of users will click on an ad')
It says something about her current estimation skills. Are these skills she is often going to need in marketing?
But overall, it was probably a good thing for her not to go there. Sounds like Google has a particular mindset (one that reminds me, anecdotally, of stories of Microsoft 15-20 years ago), and she wouldn't fit there. I'm not at all convinced that means she couldn't be effective at marketing somewhere else, though.
Some parts of marketing are about judging the bang for your buck and allocating finite resources among the various options. It sounds like that's what they wanted.
On the other hand, specific data about actual click-through rates, number of users, number of ad impressions, etc. would be required input to any reasonable approach for such judgement. Data, that is, not guesses. Estimates without ballpark cultural knowledge are also just guesses.
For my own part, never having bought Google ads, nor having displayed them, I would rather estimate no more than 1% of people would click on them no more than once per day. That's probably because I'm cynical about ads, use AdBlock, would rather rely on search and recommendation for finding products, and so do my peers. I don't have a good pool of knowledge for answering this question in a way that would be accurate, no matter what my estimation skills are.
You'll have hard data on your own products, but you can still only make guesses about your competitors' products, your complements, and other variables in the marketplace. Joining a company doesn't eliminate uncertainty, it just shifts the uncertainty from that company's numbers to everyone else's numbers.
A lot of data is kept strictly confidential; unless there's a mole somewhere, a market research firm isn't going to have it. Many of these estimates are made by applying data that you know about your own company's operations to public information available about your competitors.
