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CPA vs ROAS vs CAC
Quick answer: optimize CPA for campaign efficiency, ROAS for revenue return, and CAC for business-level acquisition economics.
Formulas
CPA = Ad Spend / Conversions
ROAS = Revenue / Ad Spend
CAC = Total Acquisition Spend / New Customers
When to Use Each Metric
| Metric | Best For | Common Mistake |
|---|---|---|
| CPA | Ad-set and campaign optimization | Ignoring conversion quality and downstream value |
| ROAS | Revenue efficiency by channel or campaign | Treating revenue return as profit without margin context |
| CAC | Business-level growth and payback planning | Comparing CAC without LTV and retention context |
Decision Framework
- Use CPA to tune traffic and conversion efficiency daily.
- Use ROAS to prioritize channels and creatives weekly.
- Use CAC with LTV and payback period for scaling decisions monthly.