1. Definition

  • Paid CAC = the average cost to acquire a customer only from paid channels.
  • Unlike Blended CAC (which mixes paid + organic), Paid CAC isolates the efficiency of channels like:
    • Google Ads, Facebook Ads, LinkedIn Ads
    • Sponsored content, affiliates, events
    • Any direct paid marketing spend

2. Formula

$\text{Paid CAC} = \frac{\text{Total Paid Marketing Spend}}{\text{Customers Acquired from Paid Channels}}$

  • Numerator → ad spend, agency fees, creative costs, event sponsorships, etc.
  • Denominator → only the customers attributed to those paid channels.

3. Example

Suppose in one month:

  • Paid ad spend = $50,000
  • Customers acquired from paid campaigns = 400

$\text{Paid CAC} = \frac{50,000}{400} = \$125 \text{ per customer}$

4. Why It’s Useful

  • Shows true cost of scaling paid campaigns.
  • More realistic than Blended CAC when your growth relies on paid ads.
  • Helps compare ROI across paid vs. organic acquisition.

5. Limitations

  • Ignores organic/word-of-mouth/SEO channels that may be much cheaper.
  • Attribution is tricky: many customers interact with both paid + organic before converting.
  • Paid CAC can look high in the short run (before retargeting, LTV payback).

6. Paid CAC vs. Blended CAC

  • Blended CAC = total sales & marketing spend ÷ total customers.
    • Big-picture efficiency metric.
  • Paid CAC = only paid spend ÷ paid customers.
    • Tells you how expensive it is to buy growth.

Summary:
Paid CAC = paid marketing spend ÷ customers from paid channels.
It’s crucial for evaluating the efficiency of your ad spend, while Blended CAC gives the overall health view.