lurx/smb-ai-skills-hub/ads-math

CPA = Total Spend / Total Conversions
 
Inputs needed:
- Total ad spend (period)
- Total conversions (same period)
 
Output:
- CPA with period context
- CPA trend (if historical data provided)
- Comparison to industry benchmark (from benchmarks.md)

ROAS = Revenue from Ads / Ad Spend
ROAS% = (Revenue - Spend) / Spend × 100
 
Inputs needed:
- Total ad spend
- Total revenue attributed to ads
 
Output:
- ROAS as ratio (e.g., 3.5x) and percentage (250%)
- Break-even ROAS (based on margins if provided)
- Comparison to platform benchmarks

Break-Even CPA = Average Order Value × Profit Margin
Break-Even ROAS = 1 / Profit Margin
 
Inputs needed:
- Average order value (AOV) OR average deal value
- Profit margin (gross margin %)
- Current CPA or ROAS
 
Output:
- Maximum profitable CPA
- Minimum profitable ROAS
- Current headroom (how far above/below break-even)
- Recommendation: scale, maintain, or cut

Impression Share Lost (Budget) = opportunity from budget increase
Impression Share Lost (Rank) = opportunity from bid/quality improvement
 
Revenue Opportunity = Current Revenue × (1 / Current IS - 1)
 
Inputs needed:
- Current impression share %
- IS lost to budget %
- IS lost to rank %
- Current spend and conversions
 
Output:
- Estimated additional conversions from full IS
- Budget needed for full IS (estimated)
- Priority: budget increase vs quality improvement

Projected Spend = Daily Budget × Days in Period
Projected Conversions = Projected Spend / Historical CPA
Projected Revenue = Projected Conversions × AOV
 
Scaling scenarios:
- Conservative: +20% budget → estimated impact
- Moderate: +50% budget → estimated impact
- Aggressive: +100% budget → estimated impact (with diminishing returns caveat)
 
Inputs needed:
- Current daily budget
- Historical CPA (last 30 days)
- Forecast period
- AOV (if revenue projection needed)
 
Output:
- 3 scenarios with spend, conversions, revenue projections
- Diminishing returns warning for aggressive scaling
- 20% scaling rule reminder (never increase >20% at a time)

CAC = Total Marketing Spend / New Customers Acquired
LTV = Average Revenue per Customer × Average Customer Lifespan
LTV:CAC Ratio = LTV / CAC
 
Inputs needed:
- Total marketing spend (all channels)
- New customers acquired
- Average revenue per customer (monthly or annual)
- Average customer lifespan (months)
- Optional: gross margin for unit economics
 
Output:
- LTV:CAC ratio with interpretation:
  - <1:1 = losing money on every customer
  - 1:1-2:1 = break-even to marginal
  - 3:1 = healthy (SaaS benchmark)
  - 5:1+ = may be under-investing in growth
- Payback period: months to recover CAC
- Recommendation based on ratio

MER = Total Revenue / Total Marketing Spend
 
Inputs needed:
- Total business revenue (period)
- Total marketing spend across ALL channels (same period)
 
Output:
- MER ratio (e.g., 5.0x)
- Interpretation:
  - E-commerce: 3-5x typical, 8x+ excellent
  - SaaS: 5-10x typical (higher margins)
  - Local service: 3-8x typical
- Comparison to business-type benchmark
- Note: MER captures blended efficiency including organic, brand, and retention

## PPC Financial Analysis
 
### [Calculator Name]
 
**Inputs:**
- [Listed inputs with values]
 
**Results:**
| Metric | Value | Benchmark | Status |
|--------|-------|-----------|--------|
| [Metric] | [Value] | [Benchmark] | PASS/WARNING/FAIL |
 
**Interpretation:**
[1-2 sentence analysis]
 
**Recommendation:**
[Actionable next step]