Guide
Benchmarks & how to read your result
How to read and act on your result — research-backed context with linked sources for every benchmark cited.
How the funnel is calculated
The funnel volumes chain from impressions down to revenue:
- ad spend = CPM × impressions ÷ 1,000
- clicks = impressions × CTR ÷ 100
- conversions = clicks × CVR ÷ 100
- new customers = conversions × new-customer share ÷ 100
- revenue = conversions × AOV
From those, the four headline metrics and the health ratio:
- ROAS = revenue ÷ ad spend
- CPA = ad spend ÷ conversions (cost per conversion)
- CAC = ad spend ÷ new customers (cost per new customer)
- LTV = AOV × orders per customer × gross margin ÷ 100 (contribution basis)
- LTV:CAC = LTV ÷ CAC
For example: 500,000 impressions at a $12 CPM = $6,000 ad spend. A 1.2% CTR yields 6,000 clicks; a 3% CVR yields 180 conversions; a $90 AOV yields $16,200 revenue. That's a 2.7x ROAS, a $33.33 CPA, and — at a 70% new-customer share — a $47.62 CAC. With 3 lifetime orders at a 60% gross margin, LTV is $162, an LTV:CAC of 3.4:1.
Methodology & sources
The model uses standard paid-media funnel arithmetic. LTV is deliberately contribution-based (× gross margin) rather than gross-revenue, because acquisition decisions should compare cost to profit, not to top-line. The 3:1 LTV:CAC benchmark is a widely cited SaaS/DTC rule of thumb, not a hard rule — the right ratio depends on payback period, growth stage, and margin structure.
Related tools: ROAS Calculator, MER Calculator, CPM Calculator, Customer LTV Calculator
Browse all marketing calculators
Full-Funnel Marketing Calculator
Model your entire paid-media funnel — impressions, CPM, CTR, CVR, and AOV — and instantly see ROAS, CPA, CAC, and LTV. Change any input to watch every downstream metric update, and gauge unit economics with an LTV:CAC health ratio.
Free Calculator
No sign up required. Use this calculator as much as you need.
Stop calculating by hand
Want AI to track this across every creative variant — and tie it back to ROAS automatically? That’s what AdSights does.
Request early accessRelated Calculators
ROAS Calculator
Calculate and analyze your return on ad spend (ROAS) to optimize campaign performance. Get data-driven insights on advertising efficiency, revenue attribution, and budget allocation to maximize marketing ROI.
CPM Calculator
Calculate Cost Per Mille (CPM) and analyze advertising campaign performance with precision. Get comprehensive insights on media buying efficiency, budget optimization, and campaign ROI analysis.
CPV Calculator
Calculate cost per view (CPV) for your video campaigns, plus view rate, CPM, and cost per ThruPlay. Works for YouTube, Meta, and TikTok — with a clear breakdown of how each platform defines a "view".
Related Terms
Click-Through Rate
Click-Through Rate (CTR) measures the ratio of clicks to impressions for a digital advertisement, email, or other clickable content. It's a fundamental metric for evaluating creative relevance, audience targeting quality, and overall ad effectiveness in driving user engagement. CTR varies significantly by format, placement, and channel, making context crucial for performance evaluation.
Cost Per Mille
Cost Per Mille (CPM) represents the cost an advertiser pays to deliver 1,000 ad impressions to their target audience. This metric is fundamental for media planning and buying, enabling comparison of advertising costs across different platforms, formats, and audience segments. CPM pricing reflects placement quality, audience targeting precision, and market demand.
Cost Per Acquisition
Cost Per Acquisition (CPA) measures the average cost required to acquire a customer or generate a complete conversion, such as a purchase, subscription signup, or other primary business objective. This metric focuses specifically on marketing and advertising costs associated with customer acquisition, making it distinct from the broader Customer Acquisition Cost (CAC) which includes all business costs.
