Oak Grove Vineyards recently set up an e-commerce site to sell monthly wine club subscriptions to its award-winning collection of California wines. The company knows that it will earn $70 in profit in just the first month that each customer subscribes. The marketing manager is using Google Ads to promote the new service, and she has calculated that the conversion cost for her current Google Ad is about $45 per subscriber. What does this data tell her?
A) The ad campaign is profitable as is.
B) She should discontinue the ad campaign because it's not profitable.
C) If she could find a way to decrease the conversion cost, she could make the campaign profitable.
D) She needs to figure out how to increase the profit per subscriber.

Question

Oak Grove Vineyards recently set up an e-commerce site to sell monthly wine club subscriptions to its award-winning collection of California wines. The company knows that it will earn $70 in profit in just the first month that each customer subscribes. The marketing manager is using Google Ads to promote the new service, and she has calculated that the conversion cost for her current Google Ad is about $45 per subscriber. What does this data tell her? ​
A) The ad campaign is profitable as is.
B) She should discontinue the ad campaign because it's not profitable.
C) If she could find a way to decrease the conversion cost, she could make the campaign profitable.
D) She needs to figure out how to increase the profit per subscriber.

Quizplus · Accepted Answer

The data indicates that for each subscriber, the company makes a profit of $70 in the first month, while the cost to acquire a subscriber through the Google Ad is $45. This means the company is making a profit of $25 ($70 - $45) per subscriber from the first month, indicating the ad campaign is already profitable.

Oak Grove Vineyards Recently Set Up an E-Commerce Site to Sell