Traffic Acquisition Cost - TAC

Internet media company term. You drew some number of new users to your site, and each consumed 10 pages, on which you sold ads. You spent some dollar amount on marketing (probably checks made out payable to Google Search).

What did that traffic cost you? Was it worth it? Via GOOG, you can do the math now. You spent $1,000 for so many eyeballs to view your website ads. That money drove to you 100,000 clicks, and of those clicks, 500 actually bought from you. And when they did, the average sale was $100, for total revenues of $50,000, and a contribution margin of $12,000.

So...was it worth it? Oh, absolutely-and-a-half. Huge bargin. The hard part: trying to perform the same magic of making 12x your money back on one 2-week campaign, while spending $5 million in hopes of making $60 million. Yeah, not so easy now.