rs c. The .25 person number found in the COA example result came from 1000 page views that cost 30 dollars. The cost of acquisition of a paying customer in the example was 120 dollars. This means it required 4000 page views or 4*30 dollars. Consequently, 4000 page views ($120) results in one paying customer 4*.25. d. All are true
rs c. The .25 person number found in the COA example result came from 1000 page views that cost 30 dollars. The cost of acquisition of a paying customer in the example was 120 dollars. This means it required 4000 page views or 4*30 dollars. Consequently, 4000 page views ($120) results in one paying customer 4*.25. d. All are true
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
100%
Based on the COA example in the marketing math spreadsheet, how can you purchase 1 paying customer when 1000 page views resulted in only .25 of a paying customer?
a. This is an irrelevant concern.
b. Because one customer purchases 2000 dollars
c. The .25 person number found in the COA example result came from 1000 page views that cost 30 dollars. The cost of acquisition of a paying customer in the example was 120 dollars. This means it required 4000 page views or 4*30 dollars. Consequently, 4000 page views ($120) results in one paying customer 4*.25.
d. All are true
e. All are false
Transcribed Image Text:COA - Cost of Customer Acquisition using the traditional CPM model of adertising pricing:
STEP ONE: DETERMINE THE INITIAL PROFIT ANALYSIS (FIRST PURCHASE)
Example: Home Theater Equipment
COA - Costs of acquring one paying consumer
Number
Customers
1000 Home theater company pays usatoday.com 30$ for every 1000 customer page
views (Page view means when a consumer goes to usatoday.com that has the
home theater banner ad)
50 Home theater company had 5% of page viewers clicked thru. Meaning a
customer clicked on the usatoday.com banner ad to go to Home Theater's web
site. This rate was determined with marketing research -- tracking number of
customers clicking on usatoday and also those who also clicked on Home
Theater link.
CPM for banner ad
$
30.00
Click thru rate
5.00%
This is the percentage of those those customers who clicked-thru that also
purchased products. Hint: how many page views would it take increase from
0.25 .25 of customer to 1 whole customer?
Conversion rate
0.50%
COA - Costs of acquring one paying
consumer
120.00
This is the marketing, selling, advertising costs of acquiring one customer
%24
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