Measuring what works

Blended CAC: what it is, and why it differs from paid CAC

Blended CAC is your total acquisition spend divided by all the new customers you won, however they arrived.

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Paid CAC is paid media spend divided by the new customers your ads are credited with. The same month produces two different numbers, and both are right.

Why it matters

The decision blended CAC changes is whether the business can afford to grow. If a customer costs £25.00 to acquire across everything and is worth £60.00 in contribution over their life, growth pays for itself. If the blended figure creeps up towards the lifetime value, growth is eating the margin, however good any one channel looks. Paid CAC can't answer that question, because it leaves out the customers who came from search, referrals and your own email list, and the cost of the people and tools that produced them.

How it works

Here is a worked month with made-up numbers.

The shop won 500 new customers in the month. Its attribution reports credit 250 of them to paid ads, under last click.

Paid CAC is 10,000 ÷ 250 = £40.00. Blended CAC is 12,500 ÷ 500 = £25.00. The CAC formula page covers what goes into the numerator in more detail.

Blended ROAS works the same way on revenue. If the month's revenue was £60,000.00 and ad spend was £10,000.00, blended ROAS is 60,000 ÷ 10,000 = 6.00. If the ads were credited with £15,000.00 of that revenue, paid ROAS is 15,000 ÷ 10,000 = 1.50. The marketing efficiency ratio is blended ROAS under another name, with total marketing spend in the denominator rather than ad spend alone.

Blended CAC is the business's number: what a customer costs all in. Paid CAC belongs to the channel, and shows what a customer costs through the ads as far as the attribution can tell. Blended goes in the board pack and the unit economics. Paid goes to the person managing the account, who needs to know whether this month's bids were better than last month's.

What it can't tell you

Blended CAC hides the channels. A rising blended figure says something got worse and nothing about what. The paid figure, split by channel, is where you look next.

It is only as good as the new customer count. Counting an order from a returning customer as an acquisition pushes the figure down and flatters everything. Your order data has to distinguish first orders from repeats, which ad platforms generally can't.

Paid CAC inherits every weakness of the attribution behind it. The 250 credited customers above are a last click count. Under a different model it might be 200 or 320, and paid CAC moves with it while the blended figure stays put.

When to use it

Report blended CAC monthly, alongside the ratio of lifetime value to CAC, as the test of whether growth is affordable. Report paid CAC by channel weekly, to see whether each channel is doing its job. If blended sits well below paid, as above, most of your customers are arriving through channels you don't pay per click for.

Tracking it in a spreadsheet

The inputs are ad spend by platform and new customers for the month, meaning first orders from your order data. The other acquisition costs usually come from invoices rather than any feed. A scheduled Fresh Sheets report can keep Google Ads, Meta Ads and TikTok Ads spend current in their own tabs. Fresh Sheets replaces each tab's contents on every refresh, so keep the spend table, the new customer count and both CAC figures on a separate tab.