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Because the accountability of Internet advertising makes CPA (Cost Per Acquisition) measurable, the next critical question is how to minimize it.

Most advertisers attack CPA with two objectives: minimize CPM (Cost Per Thousand Impressions) or CPC (Cost Per Click), and maximize CTR (Click-Through Rate). In other words, get the most clicks possible for the least money. Both techniques are, of course, very effective in lowering CPA.

However, once a user clicks, the receiving site must be designed to turn the user’s arrival into a conversion (sale, registration, etc.) in order to close the deal. A click is a possible acquisition - the site must ensure the conversion.

Site Conversion Ratio (SCR) is likely the most important statistical measure for any e-commerce initiative. SCR describes the effectiveness of a site in turning user visits into conversions. Mathematically, it is the percentage of visitors to a site that actually convert (buy, opt-in, etc.). For example, a site with an SCR of 10% actually converts 10% of its visitors.

How important is SCR? Many Avenue A clients perform Unique Dropoff Analysis (UDA) to determine the reasons why potential customers fall away without converting, and to develop strategies for retaining them in the future. Other companies market their efforts directly to their users, emphasizing the number of necessary clicks required to make a purchase, such as Amazon’s 1-Click program.

Moreover, improvements in SCR can have dramatic effects on the performance of an online advertising campaign. Consider the following example: Let’s say that your CTR is 0.5% - the current industry average, and your impressions are bought at a $10 CPM. Given an SCR of 10%, your CPA will be 20.00. However, if you can drive your SCR to 20%, you can lower your CPA to $10 - a 50% decrease.

So assume your online advertising budget for the year is $1 million. What’s the value of this increase in your site’s SCR? $1 million - you double the effectiveness of every dollar you spend. It’s worth the money and the time.

How can you increase your site’s SCR? Here are eight simple suggestions:

Decrease download time – Reduce the file sizes of your site’s images, use proper HTML coding, and be sensitive to browser compatibility. Use websitegarage.com, siteinspector.com, or keynote.com to evaluate your site’s download time, especially in comparison to your competitors.

Make it obvious – Put the link to the desired action at a prominent, obvious place on your site, so that users can easily find and use it.

Eliminate clicks – Remove as many clicks, decisions, or other tasks required to complete a conversion on your site. Count the number of clicks required for a similar conversion on your competitors’ sites and try to beat it.

Emphasize security – Post a clearly recognizable link to your security information. Include a policy that ensures users that their safety is paramount when converting on your site.

Include an efficient search tool – Retain users who get “lost” on your site by including a search tool that will get them back on the path to conversion. Include it on every page of your site.

Emphasize navigability – Implement an easy-to-understand site plan, with a site map accessible from every page. Eliminate circular, looping, confusing links in favor of linear links that go both forward and backward.

Use cookies
– Minimize the amount of user effort required on return visits by using cookies to “remember” important information.

Use a consistent theme – Use advertising messages and placements that are consistent with your offering. Users that are disappointed at your content upon arrival are sure to fall away.

Finally, constantly monitor two critical metrics:

Unique Dropoff - Tie the effects of site improvements to advertising campaigns and marketing initiatives. Make improvements, evaluate results, and make more improvements.

Cost per Acquisition – Click-through is dead as a final metric of campaign performance. Target, drive and acquire.

In the evolving frontier of online competition, the next battleground for online competition is taking place. This year’s winners will be the sites that effectively retain users, instead of simply convincing them to stop by.