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Customer Acquisition Cost is the single number that separates profitable paid channels from expensive vanity metrics. Without a clean CAC calculation you cannot compare channels, set bids, or know whether scaling spend will create or destroy value. Every growth decision downstream — how much to spend, which channel to prioritise, when to cut a campaign — is anchored to this number.
CAC = Total spend ÷ New customers acquired in the same period. The period alignment is critical: spend and customers must cover the same window or the ratio is meaningless.
spend to 18000 and new_customers to 90 — note how CAC rises even though more customers were acquired.new_customers to 0 and observe the ZeroDivisionError — add a guard that returns None instead, since undefined CAC is informative.salaries variable representing the cost of the marketing team and compute fully-loaded CAC vs. ad-spend-only CAC side by side.Use these three in order. Each builds on the one before.
In one paragraph, explain what Customer Acquisition Cost (CAC) is and why it is the foundation of any paid channel analysis.
Walk me through exactly how CAC is calculated step by step — what goes in the numerator, what goes in the denominator, and what mistakes cause the number to be misleading.
We run Google Search and Meta simultaneously. Some customers see both before converting. Walk me through three attribution models — last click, linear, and data-driven — and explain how each changes our per-channel CAC and what decisions each model would lead us to make differently.