Measurement
CAC (customer acquisition cost)
CAC is the total cost of acquiring one new customer, calculated as acquisition spend divided by new customers acquired in the same period.
Two versions circulate and they differ by a lot. Blended CAC divides all marketing spend by all new customers, including those acquired organically — flattering, and useful for whole-business economics. Paid CAC divides paid spend by customers acquired through paid, which is the number that should drive a bidding decision.
CAC is only meaningful beside contribution-margin LTV and a payback period. A high CAC is fine if margin is high and payback is fast; a low CAC on a customer who never reorders is not a win.
The denominator is where it quietly goes wrong. Counting reactivated lapsed customers as "new" lowers CAC without acquiring anyone, and so does counting a second subscription from an existing household. Both make a scaling channel look more efficient than it is, and both are the default behaviour of most reporting until somebody defines "new customer" explicitly.