Advertising Media Roi Framework
by @quochungto
Use when selecting advertising media channels, calculating Customer Acquisition Cost (CAC) per channel, deciding whether to stop, measure, or scale each chan...
Example 1: Direct Mail CAC Calculation (Verbatim)
A plumbing company sends a direct mail campaign:
If the profit per job is $600: net per customer = $600 β $150 = +$450. Scale. If the profit per job is $100: net per customer = $100 β $150 = β$50. Stop and rethink.
The response rate (10%) is irrelevant in isolation. A 0.5% response rate that yields a CAC of $80 against $600 profit per sale is far better than a 15% response rate that yields a CAC of $200.
Example 2: Google Slap β Single-Source Failure
A software reseller built its entire lead flow on Google pay-per-click (PPC) ads. Monthly spend: $5,000. CAC was positive, business growing.
Google changed its ad classification rules. Overnight, the cost per click increased 5x. Monthly spend to maintain the same lead volume jumped to $25,000 β above the business's operating capacity.
The business had no alternative lead sources. It halted its Google campaign while investigating, and lead flow dropped to zero for 6 weeks. Revenue collapsed.
Prevention: Had the business maintained 5 lead sources (e.g., Google PPC + email list + direct mail + SEO content + referral program), one source failing would have reduced lead flow by roughly 20%, not 100%.
Example 3: Multi-Channel Plan for a Local Accounting Firm
Target market: Small business owners (1β10 employees) in a single metro area. Profit per engagement: $1,200/year average CLV: $4,800 (4-year average tenure) CAC threshold for front-end: $1,200 (break even on first year) CAC threshold with CLV: $2,000 (still profitable over tenure)
| Channel | Monthly Spend | CAC | Decision | Tracking | |---------|--------------|-----|----------|----------| | Google Ads (local) | $800 | $900 | SCALE | UTM + dedicated landing page | | Direct mail (local biz list) | $400 | $1,100 | MEASURE (3 months) | Unique phone # | | LinkedIn outreach | $0 (time) | Unknown | MEASURE | CRM tagging | | Referral program | $200 | $400 | SCALE | Referral codes | | Email newsletter | $50 | $600 | SCALE | Tracked links |
Total sources: 5. Diversification: ADEQUATE.
Next test: local radio (30-day test, $600 budget, unique phone number, CAC threshold $1,200).
clawhub install bookforge-advertising-media-roi-framework