CPO
CPO (Cost-Per-Offer) - in marketing, this is one of the key metrics that allows you to evaluate the return on an advertising campaign.
This parameter shows the cost of attracting a buyer who placed an order or bought a product, or left a bid for the company. In other words, this is the price of the conversion, the most important customer action in the sales funnel: purchases, placing an order.
This metric allows the advertiser to know at a glance whether their ad spend will pay off. Before the advent of the CPO, he had to pay either for ad impressions or for clicks. Back then, the pay-per-order model didn't exist. There was a similar, related metric - pay per action. But these include registration, watching a video, an application for a call, and not just buying a product.
Thus, the list of conversion actions in the previous model was very wide, so the CRO indicator has become a much more effective alternative. The advertiser sees the main target action, pays only for it, and this is effective, because even a call to a consultant or a callback order is not a guarantee that the order will be placed. CPO is a narrower metric with maximum efficiency.
Where is CPO used?
Cost Per Order is a metric according to which the advertiser pays the site a percentage for a user making a purchase, so this indicator will be effective wherever the company's activities are related to sales. CRO is not a parameter for evaluating the effectiveness of advertising. This metric allows you to evaluate the channel itself.
So, you can get excellent data on clicks to the site from contextual advertising ads. But the attracted traffic will not be converted into orders. Marketers will have to find "holes" in their sales department.
CRO metric allows you to analyze advertising channels, find out in which of them advertising costs less. This indicator can be calculated using the formula:
If the price of one order is lower than the CRO, then the advertisement turned out to be unprofitable, and if it is higher, the advertisement has demonstrated its effectiveness.
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