Ecommerce profitability hinges on understanding your Customer Acquisition Cost (CAC) and Customer Lifetime Value (LTV), aiming for a crucial 3:1 LTV:CAC ratio to ensure sustainable growth and profitable ad spend.
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Ecommerce Ad Math: CAC, LTV, and the 3:1 Ratio That Buys Your Business
You're throwing cash at Facebook and TikTok ads, but are you actually making money? Ecommerce ad math isn't just about clicks and impressions. It's about cold, hard cash: Customer Acquisition Cost (CAC), Customer Lifetime Value (LTV), and the brutal 3:1 ratio that separates the winners from the broke. If you don't nail these metrics, you're building a house of cards that one ad account ban can collapse.
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