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CPPA: It’s Not a Typo! Cost per Profitable Acquisition is the Metric to Measure

Advertisers Can Use IXI Digital Solutions to Enhance Targeting and Reduce CPPA by More than Half
By using IXI’s estimated wealth measures to better target customers, advertisers can reduce campaign CPPA by more than half and enhance acquisition efforts by focusing ad spend on visitors that are more likely to become profitable new customers.
Introduction

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 prefers to keep it in low-cost deposit products.

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.

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: Cost per Profitable Acquisition. But setting up a campaign where you know you will be evaluated on the profitability of new customers can be a scary proposition.

Improve Targeting and Reduce CPPA

With IXI’s digital solutions, online advertisers can target more of those visitors that are likely to be profitable new customers for their firm. So if you know that for your ideal customer to be profitable, he needs to have over $100,000 in assets (or total income of over $250,000 or spend over $50,000 on discretionary items), then IXI can help you ensure that more of your ads reach customers that are likely to fit this description.

Here’s an example of how CPPA works:

A leading financial services firm communicated that in order for a new customer to reach a designated profitability goal, the customer had to have over $100,000 in total assets.

By using IXI Digital’s WealthComplete® Total Assets estimate to guide its campaign, the firm was able to serve more ads to those visitors that were likely to have over $100,000 in assets and avoid serving ads to other consumers that were unlikely to meet this criterion. This would narrow the target audience significantly. IXI’s digital solutions neither incorporate nor reveal any personally identifiable information, ensuring that audience privacy is maintained.

The firm conducted an analysis to predict the gain in targeting its campaign by estimated assets.

Untargeted Campaign Targeted Campaign to Visitors Likely to Have
Assets > $100,000
Budget $500,000 $500,000
Media + Data CPM $2 $4
Impressions Served 250,000,000 125,000,000
Conversions (.01% conversion rate) 25,000 12,500
CPA $20 $40
% Reaching Target 23% 95%
Conversions in
Target Segment
5,750 11,875
CPPA $86.96 $42.10

While the CPA for the targeted campaign was double that of the untargeted campaign, the CPPA for the targeted campaign was less than half that of the untargeted campaign. The CPPA metric showed that targeting consumers by estimated wealth was not only helpful for the bank’s bottom line profits, it was more cost-effective for the online acquisition marketing team too.

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