- A.Paid search advertising — bidding on keywords to appear in search results, paying per click, with auctions optimizing for relevance.
- B.Tracking customers grouped by acquisition period to compare retention, revenue, and behavior over time — exposes trends that aggregated data hides. ✓
- C.Customer Lifetime Value divided by Customer Acquisition Cost — the dominant unit-economics metric for evaluating customer-acquisition efficiency.
- D.Tracking customers grouped by acquisition period to compare retention, revenue, and behavior over time — exposes trends that aggregated data hides.
Cohort Analysis is tracking customers grouped by acquisition period to compare retention, revenue, and behavior over time — exposes trends that aggregated data hides. The other options describe related but distinct concepts in Digital & Analytics — see the deep-dive guide for the full distinction.
How to think about questions like this
Aggregated data hides whether new cohorts are improving or declining. Questions like this test whether you can distinguish Cohort Analysis from neighboring concepts. The most common trap is choosing a closely-related concept that sounds similar but applies in a different context.
When you see a definition question on an exam, do two things: (1) translate the question into your own words, then (2) generate the answer in your own words before reading the options. This avoids the cognitive bias of recognizing a familiar phrase as correct just because it is familiar.