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independence2 unconnected
applies to

b2b, no audience needed

assumes $20 to $100

confidence

high

evidence

4 claims · 3 articles · 3 receipts

window

2020-04-23 → 2020-06-06

2 builders who never spoke to each other

Judge the spend on years, not on month one

A cohort that looks like a loss on day one can pay back several times over: one worked example put three and a half thousand dollars of spend against two thousand one hundred in the first year and six thousand three hundred across seven years of retained accounts. Pass purchase value back through the pixel so return on spend is calculated for you, and treat anything above one on first month revenue as workable when lifetime value is several times acquisition cost. A simpler rule some use is ninety day breakeven: if a source pays for itself in that window, pour traffic in until it stops working, and if it does not, drop it.

The method

  1. 01

    Judge paid acquisition on multi year revenue rather than year one, since a cohort that looks like a loss on day one can pay back several times over the life of the account.

  2. 02

    Pass purchase value back through the pixel so return on ad spend is calculated for you, and treat a figure above 1.0 on first month revenue as workable when lifetime value is several times the acquisition cost.

  3. 03

    Model a buying-intent keyword as converting somewhere between 7% and 20% to a paying customer when you size a paid search budget.

  4. 04

    Judge a paid traffic source on whether it breaks even within 90 days: if it does, pour more traffic in until it stops working, and if it doesn't, drop it.

What it returned

  • $3,500

    Worked example: $3,500 of spend returning $2,100 in year one but $6,300 across seven years of retained accounts.

  • 1.0

    Guideline given as ROAS over 1.0 with an LTV of 3x to 10x CPA.

  • 2024

    Matt Paulson's rule, quoted from January 2024.

Sources

the second source

Three plays a week, for the phase you are in

No roundup of links, no news. Three tactics more than one builder arrived at separately, with the numbers each one returned and the disagreements left in.

One email a week. Unsubscribe in one click, and the address is used for this and nothing else.

More in ads

all ads plays

the second source

Three plays a week, for the phase you are in

No roundup of links, no news. Three tactics more than one builder arrived at separately, with the numbers each one returned and the disagreements left in.

963 corroborated plays to draw from · 3 a week

One email a week. Unsubscribe in one click, and the address is used for this and nothing else.