Company Y acquired The Seoul Post in February 2021 for $315 million. Suppose the yearly margin per Seoul Post reader is $1 per year (coming from advertising), and the yearly retention rate is 70%, and assume a yearly discount rate of 10%.

(a) What is the difference between the price for which Company Y acquired the Seoul Post and the CLV of the 120 million unique visitors who will visit the Seoul Post this month?

(b) How many new readers should the Seoul Post acquire to close that gap, assuming an acquisition cost of $0.50 per reader? That is, how many new readers should it acquire to raise the CLV of its readers to $315 million, where the CLV of new readers is reduced by the acquisition cost?

Answer rating: 100% (QA)

a The CLV customer lifetime value formula can be expressed as CLV margin per customer per year disco... View the full answer