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Assume that WilyMarketer.com is running an email campaign to acquire new customers. It is considering two options: review the following option choices. In either event, actual campaign management will be outsourced to an interactive agency. Which program would you recommend and why?
A: Option A would use a high-quality rental list of 100,000 email addresses. Direct costs under this option would be the rental list at $250/m and creative, program management and reporting costs will be $10,000. If the email campaign brings in 623 new customers, what is its customer acquisition cost?
B: Option B would rely on banner advertising at $20 CPM, which has a predicted click-through rate of 1.5 percent. The campaign is designed to reach 100,000 viewers, and its creative, program management and reporting costs will be $10,000. How many customers will it bring in and what is the customer acquisition cost?
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