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Advertising

What is CAC (Customer Acquisition Cost)?

The total cost of winning one new customer — CAC = marketing spend ÷ number of new customers.

Detailed definition

CAC is a core performance indicator in e-commerce, SaaS and lead-generation models. It is tracked together with the LTV/CAC ratio; 3:1 is a commonly used reference point, but the right target depends on margin and cash flow. Ways to reduce CAC: raise the conversion rate, use retargeting and lookalike audiences, and invest in organic channels.

Examples

  • If 10,000 TL of advertising and 1,000 TL of tools win 50 new customers, CAC is 220 TL.

Related terms

LTV (Lifetime Value) The total revenue a customer generates for the brand over their lifetime. A critical metric in subscription and e-commerce models. ROAS (Return on Ad Spend) The revenue returned by an advertising investment — ROAS = revenue ÷ ad spend. CPC (Cost Per Click) The advertising cost you pay for each click. It varies with the sector and the level of keyword competition. Conversion Rate The percentage of visitors to your site who complete the desired action (a purchase, a form submission). Performance Max (PMax) Google's AI-driven campaign type — it automates the whole inventory of Search, Display, YouTube, Shopping and Maps in a single campaign.
Category Advertising

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From the same category

Other terms in the Advertising category

Google Shopping Ads E-commerce ads that appear in Google search results with a product image, a price and the brand. Lead Form Ads A format in which the user fills in the form inside the ad when they click it, without going to the site. Meta Pixel JavaScript code that reports visitor behaviour on your site to Meta. Used for building audiences and conversion optimisation. CAPI (Conversions API) A way of sending conversion data to Meta from the server; it complements the browser-based Pixel. Lookalike Audience An audience of new users who resemble your existing customers; built from a customer list in Meta Ads. Retargeting (Remarketing) Showing ads again to users who visited your site but did not convert.
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