Search Engine Marketing: It’s The Acquisition Cost That Matters
By Anna Johnson on February 11th, 2010When it comes to search engine marketing, not all clicks are equal. Not only can two different click-throughs carry different prices… but two clicks that cost the same won’t necessarily be worth the same to you. It’s the acquisition cost that really matters.
Your acquisition cost is the cost of acquiring a customer, lead, opt-in, or whatever is your ultimate campaign ‘acquisition’ objective. This is more instructive than your click cost because if the cost of someone clicking on one keyword or ad is $2 and the cost of clicking on another is $5, but the $2 click carries a lower conversion rate such that your acquisition cost is $50, and the $5 click results in an acquisition cost of just $30… then the higher costing keyword is actually more valuable.
The upshot of this scenario is that you really want to identify your campaign objectives – i.e. will you measure success based on customers, leads, optins? – and then the cost of achieving those objectives. If the aim is to acquire a customer, lead or optin then the most appropriate metric is ‘cost per acquisition’ or acquisition cost and it’s this, rather than the cost per click, that you’ll want to monitor in assessing the cost-effectiveness of your pay-per-click (PPC) advertising campaigns.
On that basis, when evaluating keywords and ad copy think in terms of acquisition cost, not just cost per click.
