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Profit Allocation Model: Driving Growth and Student Engagement

​​​​​​Overview (3.8M College Students Subscribers)

 
In the 2023-2024 academic year, approximately 15.2 million undergraduate students were enrolled in U.S. colleges and universities. Our initial goal is to reach 25% of this population, which translates to enrolling about 3.8 million undergraduate students in our program. 

Based on the analysis of major companies across various sectors including technology, e-commerce, fast food, coffee chains, and entertainment, we have estimated the combined advertising expenditures directed towards college students through direct email advertisements.
 
Here is a chart for the top companies in Technology, Entertainment, E-commerce/Retail, Food Delivery, and Grocery Store Chains, including their total advertising spend and estimated college-directed spend: (1)


Technology

                      Total US            Estimated College
                      Advertising        Advertising Spend
  Company      Spend              (10-15% of total)

Apple           $1.8B  (2022)       $180-$270M
Microsoft      $1.5B  (2022)       $150-$225M
Google         $2.6B (2022)        $260-$390M 
Intel              $1.2B (2022)        $120-$180M
Amazon      $10.4B (2022)      $1.04-$1.56B




Entertainment

                        Total US             Estimated College
                        Advertising        Advertising Spend
Company         Spend                 (10-15% of total)


Disney                 $3.1B (2022)     $310-$465M
Netflix                  $1.8B (2022)     $180-$270M
Warner Bros.       $2.5B (2022)     $250-$375M
NBCUniversal      $1.2B (2022)     $120-$180M
Spotify                 $1.0 b (2022)     $100-$150M



E-commerce/Retail

                          Total US             Estimated College
                          Advertising         Advertising Spend
Company           Spend                (10-15% of total)                                  

Amazon             $10.4B (2022)     $1.04-$1.56B
eBay                  $1.2B (2022)        $120-$180M 
Walmart             $3.7B (2022)        $370-$555M 
Alibaba              $3.0B (2022)        $300-$450M 
Target                $1.5B (2022)        $150-$225M 



Food Delivery

                            Total US              Estimated College
                         Advertising         Advertising Spend  
Company             Spend                (10-15% of total)

DoorDash           $163.5M (2022)       $16-$25M 
GrubHub              $97.9M (2022)       $10-$15M 
Uber Eats               $1.0B (2022)   $100-$150M
Postmates              $50M (2022)        $5-$7.5M 
Instacart              $33.8M (2022)          $3-$5M 



Grocery Store Chains

                                 Total US          Estimated College
                                 Advertising      Advertising Spend
Company                  Spend             (10-15% of total)

Walmart                 $3.B (2022)         $370-$555M
Kroger                  $1.2B (2022)         $120-$180M 
Costco                 $1.0B (2022)         $100-$150M 
Albertsons          $500M (2022)            $50-$75M 
Publix                 $300M (2022)            $30-$45M



Coffee/Quick Service Restaurant

                                 Total US            Estimated College
                                 Advertising       Advertising Spend
Restaurant               Spend               (10-15% of total)

McDonald's           $776.8M (2019)        $77-$116M
Domino's               $441.6M (2019)          $66-$88M
Taco Bell               $377.5M (2019)          $56-$75M
Burger King           $348.8M(2019)           $35-$52M
Subway                $250.5M (2019)            $37-$50M
Wendy's                  $247M (2019)            $25-$37M 
Starbucks             $416.7M (2022)           $42-$63M
Dunkin'              $135M (recent yr.)           $14-$20M
Pizza Hut          Over $100M (recent yr.)    $15-$20M
Papa Johns           $53.9M (2023)                $8-$11M 
Little Caesar   Under $100M (recent yr.)    $10-$15M 
Chipotle              $153.4M (2022)               $15-$23M



Summary

These estimates assume that 10-15% of the total advertising budget is directed specifically towards college students, varying slightly based on each brand's known strategies and target demographics. The actual figures could vary significantly based on each company's specific marketing strategies and priorities.



Grand Total Summary

                                     Total US            Estimated College
                                     Advertising       Advertising Spend
Category                      Spend              (10-15% of total)


Technology                   $17.5B             $1.75 - $2.625B
Entertainment               $9.6B               $960M - $1.44B
E-commerce/Retail       $19.8B               $1.98 - $2.97B
Food Delivery               $1.345B         $134.5 - $202.5M
Grocery Store Chains   $6.7B             $670M - $1.005B
Coffee/Quick Service    $3.4B                   $400 - $570M   
                                           


Grand Totals:   

Total US Advertising Spend:      $58.346 billion 
Estimated College Advertising Spend:    $5.895 - $8.813 billion



Key Observations:

The total US advertising spend across all categories is approximately $58.346 billion.
The estimated college advertising spend ranges from $5.895 billion to $8.813 billion, representing about 10-15% of the total advertising spend.

E-commerce/Retail and Technology are the biggest spenders on advertising, with a significant portion potentially directed towards college students.

The Coffee/Quick Service Restaurant category, despite having more individual companies listed, has a lower total advertising spend compared to the top categories.

Food Delivery has the lowest total advertising spend among the categories, but it's likely that a higher percentage of their advertising is targeted at college students.

These figures demonstrate the significant financial investment these companies make in advertising, with a substantial portion potentially targeting the college demographic.
It's important to note that these figures are estimates based on available data and industry averages. The actual amounts spent on college advertising may vary depending on each company's specific strategies and priorities.




Summary Table

                                         Lower Estimate          Upper Estimate
Category                             ($5.895B                   ($8.813B)

Total Revenue                     $5.895B                         $8.813B
80% to Students                  4.716B                          $7.0504B

 
Remaining 20%                   $1.179B                        $1.7626B
   Expenses (1%)                 $58.95M                       $88.13M  
   Dividends (5%)                 $294.75M                     $440.65M
   Retained Earnings (10%)  $589.5M                      $881.3M
   Profit/Cash (4%)                $235.8M                      $352.52M

 
 
​
Breakdown for 3.8M Students at Various Cash Credits Percentages
 
Student Payout            Lower Estimate   Upper Estimate
Percentage                  ($5.895B)            ($8.813B)
         

 30%                              $465.39               $695.76
40%                              $620.53               $927.68
50%                              $775.66               $1,159.61
60%                              $930.79               $1,391.53
70%                              $1,085.92            $1,623.45
80%                              $1,241.05            $1,855.37



Conclusion

By distributing up to 80% of the revenue as to students and allocating the remaining 20% to expenses, dividends, retained earnings, and profit/cash, you can ensure a balanced approach to rewarding students while maintaining financial stability and growth for the company. The suggested breakdown provides a clear allocation strategy for both the lower and upper revenue estimates.   

​
1. Summary of Sources

Amra And Elma LLC:   FOOD MARKETING STATISTICS IN 2024
eMarketer:  US Ad Spending 2024
Forbes: Ad Spending Growth To Accelerate In 2024
Statista: Digital advertising spending worldwide 2021-2027
Statista Market Forecast: Advertising - United States
Business of Apps: Food Delivery App Revenue and Usage Statistics (2024)
eMarketer: Worldwide Digital Ad Spending Forecast 2024
Marketing Dive: Dentsu now expects global ad spend to reach 5% growth in 2024

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