The right marketing target depends on your business model. Retention-heavy businesses should target based on Customer Acquisition Cost (CAC). Businesses with mostly one-off purchases should target based on Marketing Efficiency Ratio (MER) or Marketing Profit Ratio (MPR).
Retention-heavy business → CAC targets
If you run a retention-heavy business (subscriptions, consumables, high repurchase rates), target based on Customer Acquisition Cost (CAC) — the upfront investment you make to initiate a customer relationship.
The goal is to optimise for both profitability and liquidity: how much are you willing to invest per new customer before they become profitable?
Use the Cohort Report to find your CAC and break-even timeline:
Look at the Contribution Margin 2 column to understand cumulative profitability over time
If you're comfortable not being profitable on the first order and want to break even after, say, 4 months, look at the cumulative value in column "4" — that's your target CAC
Once-off purchase business → MER or Marketing Profit Ratio targets
If most of your customers buy only once (or have low repurchase rates), target based on your Marketing Efficiency Ratio (MER) or Marketing Profit Ratio (MPR).
How to derive your target:
Open the P&L report and look at the past 12 months for a complete picture
Derive your target from your CM2 and CM3 margins — these reflect the profitability you need to sustain and grow
⚠️ MER is a blended, top-line metric — similar to a global ROAS. It does not translate directly into individual ad account targets. Use Klar attribution to bridge the gap between your MER target and channel-level decisions.