For paid media campaigns, which KPI is used to measure cost efficiency?

• A. Cost per click
• B. Impressions
• C. Profits per customer
• D. Customer acquisition cost

Answer: (C)

Measuring cost efficiency in paid media centers on how much you spend to gain a customer. Customer acquisition cost is the metric that captures this directly: it equals total ad spend divided by the number of customers acquired through the campaign. This tells you, in dollars, how efficiently the campaign turns spend into new customers and lets you compare different channels or creatives to optimize the budget.

Other metrics don’t assess cost efficiency in the same way. Cost per click focuses on the price of each click, not whether that click leads to a customer. Impressions measure reach, not how much you’re spending to convert. Profits per customer looks at profitability after revenue and costs, but it doesn’t reflect how efficiently the ad spend converts into customers.