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Campaign cost objectives

The final aspect of objective setting to be considered is the constraints on objectives

placed by the cost of traffic building activities. A campaign will not be successful if it

meets its objectives of acquiring site visitors and customers but the cost of achieving this

is too high. This constraint is usually imposed simply by having a campaign budget – a

necessary component of all campaigns. However, in addition it is also useful to have spe-

cific objectives for the cost of getting the visitor to the site using different

communications tools such as search engine marketing combined with the cost of

achieving the outcomes during their visit. This is stated as the cost per acquisition (CPA)

(sometimes cost per action). Depending on context and market, CPA may refer to differ-

ent outcomes. Typical cost targets include:


 cost per acquisition – of a visitor


 cost per acquisition – of a lead


 cost per acquisition – of a sale.

To control costs, it is important for managers to define a target allowable cost per acquisition

such as £30 for generating a business lead or £50 for achieving sign-up to a credit card.

To summarise this section on setting objectives for interactive marketing communica-

tions and controlling costs, review Figure 8.11.

Figure 8.11 shows different measures from least sophisticated to more sophisticated as

follows:

0 Volume or number of visitors

This is usually measured as thousands of unique visitors. It is preferable to using page

views or hits as a measure of effectiveness, since it is opportunities to communicate with

individuals. A more sophisticated measure is reach (%) or online audience share. This is

only possible using panel data/audience data tools such as http://www.netratings.comor

http://www.hitwise.com.

Example: An online bank has one million unique visitors per month.

OBJECTIVES AND MEASUREMENT FOR INTERACTIVE MARKETING COMMUNICATIONS

Cost per acquisition
(CPA)
The cost of acquiring a
new customer. Typically
limited to the
communications cost
and refers to cost per
sale for new
customers. May also
refer to other outcomes
such as cost per quote
or enquiry.

Allowable cost per
acquisition
A target maximum cost
for generating leads or
new customers
profitably.

Figure 8.11Measures used for setting campaign objectives or assessing campaign

success increasing in sophistication from bottom to top

Volume = Unique visitors /

Reach (%)

Quality = Conversion rate

Cost = Cost per click (CPC)

Cost per acquisition (CPA)

Campaign ROI (%)

Branding metrics

Lifetime value

Step 0.

Step 1.

Step 2.

Step 3.

Step 4.

Step 5.

Step 6.