So this one is very intreating. Remember those AOL Promotional discs, that were around during the 1990’s? Well the CEO during that time sure did. Take a look at this quick Q&A session that he had on the site Quora.
How much did it cost AOL to distribute all those CDs back in the 1990’s?
A lot! I don’t remember the total spending but do recall in the early 1990s our target was to spend 10% of lifetime revenue to get a new subscriber. At that time I believe the average subscriber life was about 25 months and revenue was about $350 so we spent about $35 to acquire [subscribers].
Around $35 per disc; This seems like a crazy amount to spend on acquiring customers. Ah but, did it work?
When [AOL] went public in 1992 we had less than 200,000 subscribers; a decade later the number was in the 25 million range.
So, it helped to get them a lot more subscribers. So maybe $35 per disc wasn’t that bad after all.