CAC is the total cost to acquire one paying customer, including all marketing and sales expenses. It's a broader measure than CPI or CPA.
Customer acquisition cost (CAC) is the total investment required to convert a prospect into a paying customer, encompassing all marketing spend, tool costs, agency fees, and sales resources. In mobile UA, CAC specifically measures cost-per-paying-user rather than cost-per-install (CPI) or cost-per-action (CPA).
CAC is a business-level metric used in financial modeling and investor reporting, while CPI and CPA are operational metrics used for daily campaign optimization. The relationship between them is: CPI × (1/install-to-payer conversion rate) × (allocated overhead) = CAC.
For a sustainable mobile business, CAC must be significantly lower than LTV, typically by a factor of 3x or more. The CAC:LTV ratio is a core health metric watched by investors and growth teams alike.
CAC is the true cost of growth. Unlike CPI which only counts paid media, CAC captures the full cost, including tools, headcount, and creative production, of generating one paying user. This gives leadership an accurate picture of unit economics and growth sustainability.
LTV is the total net revenue a user is expected to generate over the full course of their relationship with your app, used to determine how much you can profitably spend to acquire them.
Learn moreMobile User AcquisitionROAS measures revenue generated for every dollar spent on advertising, serving as the primary efficiency metric for paid user acquisition.
Learn moreMobile User AcquisitionCPA measures the average cost to acquire a user who completes a specific in-app action, providing a deeper efficiency metric than CPI.
Learn moreMobile User AcquisitionCPI is the average amount spent in advertising to generate one app install. It's the most common efficiency metric in mobile user acquisition.
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