What a verified customer action actually costs
Advertisers are used to cost per click and cost per thousand. Cost per verified action is a different animal, and the difference is where the money is.
Cost per click looks cheap because a click is cheap to produce. It is also cheap in the other sense: it carries almost no information about whether a customer was created. Cost per verified action looks more expensive on paper and is far cheaper in practice, because every unit is a completed step by a real, identified person.
Three costs, three meanings
- Cost per thousand impressions: what it costs for a screen to render your ad, whether or not anyone looked.
- Cost per click: what it costs for a finger to touch it, whether or not anything followed.
- Cost per verified action: what it costs for a person to finish a defined step, confirmed, before any reward is released.
Why the last one is the only one you can budget against
A verified action has a floor on its value: the reward itself, which the consumer would not have earned without completing the step. Add the redemption data, the location and the timestamp, and you have a cost you can put next to a sale. The other two metrics cannot be put next to anything.
Impressions are an input. Verified actions are an output. Businesses can only budget against outputs.
Reading a TAM package
When a package says five hundred verified customer actions, divide the price by five hundred. That is your worst-case cost per outcome, before any repeat purchase. Compare it to your margin on one sale and you know, before you spend, whether the campaign can pay for itself.
Written by Teleeza Insights
