A01 chaf6542 06 se fm indd

2 

Cost (cost per click). The cost of visitor acquisition is usually measured specific to a par-

ticular online marketing tool such as paid  search-  engine marketing since it is difficult to 

estimate for an entire site with many visitors referred from different sources.

Example: £2 CPC.

3 

Cost (cost per action or acquisition). When cost of visitor acquisition is combined with 

conversion to outcomes this is the cost of (customer) acquisition.

Example: £20 CPA (since only one in ten visitors take an action).

4 

Return on investment (ROI). Return on investment is used to assess the profitability 

of any marketing activity or indeed any investment. There are different forms of ROI, 

depending on how profitability is calculated. Here we will assume it is just based on sales 

value or profitability based on the cost per click and conversion rate.

ROI =

Profit generated from referrer

Amount spent on advertising with referrer 

A related measure, which does not take profitability into account, is return on advertising 

spend (ROAS) which is calculated as follows:

ROI =

Total sales revenue generated from referrer

Amount spent on advertising with referrer