Customer acquisition cost (CAC)
CAC is the average amount you spend to acquire a single new user — all your acquisition cost divided by the users it brought in. It is the price tag on growth. On its own it is just an expense; its meaning comes entirely from comparing it against what those users are worth, which is why CAC and lifetime value are inseparable.
How it is calculated
The blended definition is straightforward:
CAC = total acquisition spend in a period / new users acquired in that period
“Acquisition spend” should include ad spend plus the marketing and sales costs attributable to it, not just media buys. Most teams track two versions: blended CAC (all spend over all new users, including organic) and paid CAC (paid spend over paid users only). Paid CAC is the honest number for evaluating a channel, because blended CAC is flattered by organic installs you didn’t pay for. Like ROAS, accurate CAC depends on clean attribution tying spend to the users it actually produced.
Why it matters
The decisive relationship in all of growth is:
LTV / CAC — lifetime value divided by acquisition cost.
If LTV comfortably exceeds CAC, every acquired user is profitable and you can spend more to scale; if it doesn’t, scaling just loses money faster. A common health benchmark is an LTV/CAC ratio of 3 or higher. Teams also watch the CAC payback period — how long until a user’s cumulative revenue repays their CAC — because a profitable user who takes a year to pay back still strains cash flow. This is the same logic ROAS expresses as a ratio over time.
In games and apps
In free-to-play, CAC is compared against an LTV that is slow to mature and skewed by whales, so teams rarely wait for full payback — they use predicted LTV against CAC to make daily bid decisions. CAC also varies sharply by channel, country and platform, so a single blended figure hides the channels that are quietly unprofitable. The goal is not the lowest CAC but the best CAC-to-value ratio at scale.
In Keentics
Keentics ties your raw revenue and retention data back to acquisition cohorts so you can read CAC against real, per-cohort LTV instead of an industry average. You can compare LTV/CAC and payback by channel, country and segment, and watch how the ratio holds as you scale spend. Explore the LTV analysis feature for the value side and game analytics for acquisition dashboards.
Related: Active users · ARPPU · ARPU · Attribution