DDM - General & Digital

Cost per Profitable Acquisition is the Metric to Measure

Segment your customers and prospects to optimize your marketing campaigns

Issue link: https://resources.datadrivenmarketing.equifax.com/i/950373

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case study CPPA: It's Not a Typo! Cost Per Profitable Acquisition is the Metric to Measure Best Practice for Online Advertisers Challenge: Targeting the Best... or Worst Customers Imagine the best possible customer your company could have. Maybe you're a bank, and the customer not only has a lot of asset wealth, but also prefers to keep it in low-cost deposit products. Or you specialize in luxury vacations, and a suburban family who enjoys spending money on quality experiences is knocking at your door. Or you offer a nifty prepaid phone and you seek a young city-dweller without much disposable income. These customers, and others just like them, are out there for you to find – and it feels great when you do. But now imagine that you're attracting the opposite of that customer. Your bank could lose money provisioning new clients that lack those valuable deposit dollars. Prospective vacationers better suited to a quick overnight trip might be monopolizing your call center's resources. Or the visitors to your wireless store don't take your products seriously because they aren't the right fit for them. Typical cost per acquisition (CPA) metrics for online advertising campaigns don't distinguish between these two types of customers – but you certainly do. Sometimes CPA just isn't enough. That's where CPPA comes in. Solution: Reevaluating Online Marketing Metrics with Cost per Profitable Acquisition CPPA, or cost per profitable acquisition, is not a new idea. In fact, analysts have been using similar metrics for years when looking at direct mail campaigns. But in the world of online marketing, where milliseconds can make or break a campaign's credibility, the idea of looking at a prospect's potential profitability is sometimes written off as being "too slow", or something that has to be done after the fact. IXI Network Member Financial Services Firm CHALLENGE Online advertisers often rely on simple CPA metrics to evaluate the success of their campaign. However, CPA fails to take into account whether a new customer is likely to be a profitable customer for the company. SOLUTION Online advertisers can improve targeting to their ideal customers and then use CPPA - Cost per Profitable Acquisition - metrics to better measure the success of their campaigns. EXPECTED RESULTS By using Digital Targeting Segments to target the ideal customers online, advertisers can reduce campaign CPPA by more than half, plus enhance acquisition efforts by focusing ad spend on visitors that are more likely to become profitable new customers.

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