Posted by nan on .
Assume that WilyMarketer is running an email campaign to acquire new customers. It is considering two options:
Option A would use a high quality rental list of 100,000 email addresses. Direct costs under this option would be the rental list at $250/m and creative, program management and reporting costs will be $10,000. If Option A brings in 623 new customers, what is its customer acquisition cost?
Option B would rely on banner advertising at $20 CPM, which has a predicted click-through rate of 1.5 percent. The campaign is designed to reach 100,000 viewers, and its creative, program management and reporting costs will be $10,000. How many customers would Option B bring in and what is the customer acquisition cost?
A: $1.74 per customer
B: 1500 customers, $0.57 per customer