Traffic Acquisition Cost (TAC)

Purpose

To acquire users' attention, drive traffic, generate leads, and make informed decisions about marketing budget allocation.

Definition

Payments made by companies to secure prominent placement or preferred access within another company's ecosystem, or variable pass-through costs ad tech vendors pay to exchanges, publishers, and data providers to sell more impressions.

Primary Users

Ad tech companies, businesses seeking to drive online traffic.

Influencing Factors

Competitiveness of the industry, targeting and messaging of advertising campaigns, and effectiveness of marketing channels.

Role in Google Antitrust Ruling

Google's billions in TAC payments to Apple were argued by the US Department of Justice to constitute an illegal monopoly.

Undated

Undated

What are traffic acquisition costs? Image 4: google analytics traffic acquisition report Whether you’re just starting with your marketing plan or need to update your approach, understanding traffic acquisition can help you target the right group and grow your site. Traffic acquisition helps you grab users’ attention in a crowded online market. Once you understand traffic and how Google categorizes it, you can start shaping your marketing strategy to your goals. Image 5: google analytics traffic sources medium Image 6: how to compute traffic acquisition cost Traffic and user acquisition might seem the same at first, but they have unique definitions per the Google Analytics report: You can view traffic and user acquisition reports with the Google Analytics update.

In simple terms, TAC is how much an ad tech company pays to buy revenue; it’s the variable pass-through costs ad tech vendors pay to the exchanges, publishers and data providers that help them sell more impressions. Anyone wanting to know how much ad tech vendors are paying publishers for the inventory on behalf of their end clients or advertisers can look at TAC. Think of it like this: whether an ad tech vendor reports TAC depends on whether they’re providing some type of service to the advertiser in addition to facilitating ad-buying as an obligor. That’s handy given many ad tech vendors will say they’re platforms for publishers and marketers to trade online advertising.

By understanding how much it costs to acquire each visitor to their website or app, businesses can make informed decisions about where to allocate their marketing budget and which channels are most effective in driving traffic and generating leads.There are several factors that can influence TAC, including the competitiveness of the industry, the targeting and messaging of the advertising campaigns, and the effectiveness of the marketing channels being used. By closely monitoring TAC and optimizing their marketing strategies accordingly, businesses can improve their ROI and maximize their online visibility and conversions.In conclusion, traffic acquisition cost is a crucial metric for businesses looking to drive traffic to their websites and apps and convert visitors into customers.

* How to Improve Marketing customer acquisition cost Marketing Spend ÷ Number of New Customers = customer acquisition cost The true customer acquisition cost calculation should include all the expenses associated with marketing and sales, such as ad spend, program costs, commissions, bonuses, and overhead expenses such as software costs. For a B2B SaaS company, calculate customer acquisition cost by dividing the total combined cost of sales and marketing expenses during a specific time period by the number of new customers acquired in that time period. How to Improve Marketing customer acquisition cost Knowing how to calculate customer acquisition cost requires you to understand CLV and CPA, as well as the ability to gather your organization’s numbers to get a full picture of marketing and sales spend and customer activity.