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If you know your LTV is $50, you can afford $50/click.

Only if your conversion rate is 100% - which it never will be :-) You need to go a bit further and multiply by your conversion rate. So 10% conversion rate == $5/click. (Not accounting for making a profit, of course.)

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And consider the time value of money - if the LTV is $50 over 2 years, you need to calculate the net present value of that cashflow to you in today's dollars (which will always be less than $50).

By definition LTV includes a discount rate, I'd bet he's using one.

Ack, yeah-- mispoke. You can afford to pay $50/customer. Conversion rate is obviously a big part of that. /facepalm Sorry for not paying better attention to what I was writing.

"We all make mistakes" said the dalek climbing off of the dustbin.

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