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  1. #1

    Advertising: cost per customer metric?

    I know that advertising ROI (return on investment) is based on the cost it takes to bring one customer in.
    What is a good metric to judge the effectiveness of an ad placement? (based on cost per customer)?
    At what point do you abandon an ad source as too expensive?
    Obviously good cost per customer is $.01, but what is the beginning of a bad cost per customer?

    also, if I advertise in a local computer magazine, what are the best ways to track the effectiveness of the ad (online advertising is easier to analyze from referal site).

    Thanks in advance.

    ! Van
    "Beer is proof that God loves us and wants us to be happy" -- Ben Franklin
    Twice Tied Laces

  2. #2
    For our magazine advertising we used two URL's in the advert, the main site and a 'special offer' URL just for those who read the advert this worked quite well. As the offer URL was only ever in the advert we knew everyone who hit it had seen the advert.

    For those people who we still couldn't track to a referrer we sent them an email after setup and just asked how they had heard of us.

    As for cost per customer that's something you need to work out based on your situation, try and work out how long you expect the customer to stay and what profit you gain if they stay that long, then make a judgement on what you are prepared to pay to gain that customer. So, if a customer stays on average 12 months and you make $100 profit in that time from them what would be a fair cost to get that customer.

    As all hosts have different objectives what one would be prepared to pay for each customer would be different from anothers.
    We make web applications including J-Board Job Board

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