Ad CAC vs CAC
Ad CAC and Overall CAC both divide an acquisition cost by new paying customers, but they answer different questions. Ad CAC divides advertising spend by the customers attributed to those ads. Overall CAC divides all sales and marketing spend, including sales salaries, by every new paying customer. Taking the numerator from one and the denominator from the other produces a number that is neither.
Key differences
| Question | Ad CAC | CAC |
|---|---|---|
| Paid advertising spend (search, social, display) | Included. It is the whole numerator. | Included, as one part of sales and marketing spend. |
| Sales salaries and commissions | Excluded. | Included. Overall CAC is incomplete without them. |
| Marketing salaries | Excluded. | Included. |
| Agencies, creative and marketing tools | Excluded. Report agency and creative fees separately. | Included, with shared costs allocated by a documented method. |
| Founder salary or time | Excluded. | Optional. Leave it out or include it, and say which. |
| Which new customers do you divide by? | Only new paying accounts attributed to the ads, under a stated attribution rule. | All new paying accounts, from every channel. |
| Reactivated or renewing customers | Excluded. | Excluded. |
One scenario, two measures
Hypothetical worked scenario
In May, a fictional SaaS company spends $12,000 on ads, $40,000 on sales and marketing salaries and commissions, and $6,000 on agencies and tools. The founders also sell part-time, unpaid for this purpose. It wins 60 new paying accounts, 24 of them attributed to the ads, and two former customers return.
Ad CAC = $12,000 ÷ 24 ad-attributed accounts = $500. Overall CAC = ($12,000 + $40,000 + $6,000) ÷ 60 new accounts = $58,000 ÷ 60 ≈ $967, with founder time excluded and disclosed. The two returning customers are in neither denominator.
Dividing the $12,000 ad bill by all 60 new accounts gives $200. That pairs a narrow cost pool with customers from every channel, so it is neither Ad CAC nor Overall CAC, and it makes paid acquisition look far cheaper than either.
Which should you use?
- Use Ad CAC to compare paid campaigns or channels with each other, and report the attribution rule beside it.
- Use Overall CAC for unit economics such as CAC payback and LTV:CAC, and whenever the question is what it costs the company to win a customer.
- Report both when ads bring in a large share of new customers, so a low Ad CAC isn't read as the cost of growth.
Where comparisons can mislead
- Attribution decides the Ad CAC denominator. A customer who clicked an ad after a sales call can be claimed by both teams; count each paying account once, under one stated rule.
- Ads this month can convert next month. Compare a lagged or cohort view when the sales cycle is long.
- Never divide ad spend by all new customers, or all sales and marketing spend by ad-attributed customers.
Explore the full guides: Ad CAC and CAC.
Sources and methodology
The references below explain the underlying methods. Our worked scenarios use hypothetical figures; they are not company results or current market benchmarks.
- Stripe: CAC in SaaS
Sales and marketing cost scope, new paying customers, and segmentation by acquisition channel.
- Bessemer: Scaling to $100 Million
Gross margin adjusted CAC payback and segment differences; historical research, not a current market benchmark.
Found an error or a definition that differs from your reporting? Send a correction with the page URL and the method you use.