A rational, efficient advertising campaign involves two key things: knowing how much a customer is worth to you (or a customer’s LTV – lifetime value) and knowing how much it will cost to acquire that customer via the advertising you intend to use (or CPA – cost per acquisition). When ego is stripped from the equation – “I like seeing that billboard of myself on the way to the office each morning” – all that remains is whether the math works. Does this Facebook ad drive sales in a revenue-positive fashion? Are we sure that this TV commercial is driving sales, and at what cost? How many ads can we run until we start to see diminishing returns?
– Ryan Holiday – “Perennial Seller”