When it comes to advertising, most merchants and business owners have good instincts about their goals and what they are willing to pay to achieve them. Acquisition costs are generally built into the profit and loss of most businesses and serve as a strategic barometer. Acquisitions costs add clarity to what a merchant or business owner expects (i.e. know), helping to anchor expectations in reality, as opposed to unknowns which never look good on profit and loss statements.
When a business decides to spend money on advertising, they are taking a calculated risk. The goal for a businessperson who has already or is about to embark on advertising campaigns should be to limit the risks or unknowns. We all want that “silver bullet”, “home run” guarantee when taking risk, unfortunately the worst thing that can happen is coming across an agency or contractor willing to give you a guarantee. The only true guarantee you can expect when spending money on advertising is that your acquisition costs will be respected.
Notice the use of the word “respected”, this is not the same as guaranteed. To achieve your desired acquisition costs, you must ask your advertiser two questions:
- Are your acquisition costs realistic / achievable?
- What’s the estimated time-frame to achieve your desired acquisition costs?
Now, we can start showing a series of math equations that backup our acquisition scenarios, but that won’t convince people. What convinces people is knowing the advertising experts you are talking to understand your brand, your demographics, the advertising platforms and will respect your acquisition costs.
At the end of the day anyone can willy-nilly spend your money on advertising and get tons of clicks, even a child can do this. What you as a merchant or business owner want is a guarantee that your acquisitions costs will be achieved in the time-frame promised, and your ad campaign costs will stay within your budget.