About this tool
This tool is designed for marketing and finance people to use to understand how investing into marketing compares with other uses of the same money. Discounted cashflow (DCF) is a very helpful metric because it enables measuring and comparing expenses which pay back both now and in the future. Future cashflows are reduced - discounted - by a factor which is based on the cost of using money, that’s the cost of capital. The sum of all future discounted cash flows gives the value of the investment to the business.
The tool uses payback data from econometrics studies by Magic Numbers, OMG, Ekimetrics, Circana, D2D, and VCCP Media via ARC, along with long term multipliers and channel variability from GroupM via Thinkbox. For creative, the tool relies on studies by System 1 and Kantar which match creative copy test scores to payback. This tool only considers payback within the first 3 years after airing, any effects in year 4 onwards are not included here.
The tool is intended as a ready reckoner to guide decision making and good conversations between marketing and finance. It’s unlikely that the numbers here will exactly match the real world outcome of either media or other investments.
Compare the cashflow was designed and built by magic numbers. Please do let us know how it’s helped and if there are any improvements you can think of, using the feedback button below.
Information and data published by Gracious Economics Ltd t/a magic numbers (Magic Numbers) on the Compare the cashflow tool (comparethecashflow.magicnumbers.co.uk) (the Website) is supplied by Magic Numbers. With respect to output of the Compare the cashflow tool, you acknowledge that there are uncertainties inherent to the data and you take full responsibility for making your own evaluation of the accuracy of such data and shall have no claim against Magic Numbers with respect to such data. Magic Numbers does not guarantee and cannot be held liable for the information made available on the Website and may change the information at any time without notice. You must not rely on the information on the Website and you acknowledge that you must take appropriate steps to verify this information before acting on it.
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