The metric that reframes acquisition cost. A $100 CPA looks expensive against a $50 first purchase. It looks reasonable against a $600 LTV. Most performance campaigns are optimized against first-transaction metrics because they are easier to measure. Optimizing against LTV requires good CRM data, a reliable prediction model, and patience. Teams that get there tend to stop arguing about CPAs and start arguing about which customers are worth acquiring.
Ad tech glossary
LTV (Lifetime Value)
Technical definition
The predicted total revenue a business expects to generate from a customer throughout their entire relationship.
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