LTV is the real budget
💰 If you don't know your LTV, you don't know your real budget, Meta and Google show rising costs and new opportunities, and more!
Howdy Readers 🥰
💰If You Don’t Know Your LTV, You Don’t Know Your Real Budget.
📊 Meta and Google Both Reported Q1 Earnings and the Numbers Were Big
👨💻 Tweet of the Day
If you’re new to Buyology then a hearty welcome to you, You’ve reached the right place alongside 50k+ amazing people, Before you forget, if someone forwarded this newsletter to you, don't forget to subscribe to our newsletter so you never miss out!
Together with Accio
Accio Work: Your Agentic Team for Real Business
Accio Work is the agentic workspace built to handle what’s eating your hours. Product sourcing, supplier negotiation, store management, and marketing execution. It connects strategy directly to action, so nothing sits waiting on you.
Backed by Alibaba.com’s global network and 1B+ products, supplier sourcing is instant and verified
Deep integrations mean it works inside the tools your business already runs on
Connects to Gmail, Slack, Notion, and every tool already in your stack
Most AI tools stop at generating ideas. Accio Work goes further. It takes action, tracks execution, and keeps your business moving while you focus on growth.
This is what running lean actually looks like at scale. Try one week free. No commitment. Just results.
Let Accio Work - Try One Week Free
💰If You Don’t Know Your LTV, You Don’t Know Your Real Budget.
CAC vs LTV is the only metric that tells you whether your Google Ads account is a growth engine or a cash drain. Almost every other metric in the platform is a leading indicator. This one is the verdict.
01 CAC Is Not Your CPA. Know the Difference.
CPA is what Google reports. CAC is what actually happened. CPA counts a conversion event. CAC counts the total cost to acquire a paying customer including leads that didn’t close, sales time, and tools. For most B2B advertisers, real CAC is 2-4x reported CPA. Optimizing toward CPA without knowing true CAC is optimizing toward a number that doesn’t reflect reality.
Calculate true CAC monthly: total ad spend plus sales costs divided by new customers, not conversions.
Set your CPA target as a fraction of true CAC. If CAC needs to be £500 and close rate is 20%, target CPA for opportunities should be £100.
Review quarterly. As close rates improve, you can afford a higher CPA. As they drop, tighten efficiency.
02 LTV Unlocks Budget Most Advertisers Can’t Access
Advertisers who know their LTV can outbid competitors who don’t. If a customer is worth £10,000 over three years and competitors bid on one-year value, they’re leaving money on the table you can take. LTV-aware bidding is a structural advantage that has nothing to do with creative or keywords.
Segment LTV by cohort, product line, channel, or company size. The average hides which segments are worth acquiring aggressively.
Feed LTV into Google Ads as a conversion value. Smart bidding will optimize toward high-value customers, not just any customer.
Set a 3:1 LTV:CAC ratio as your minimum go/no-go threshold for scaling.
03 The Segment That Looks Expensive Is Often Your Best Customer
The highest-CAC cohort usually gets cut first. That’s often a mistake. Enterprise customers carry higher acquisition costs, but frequently 5-10x the LTV of cheaper leads. Cutting high-CAC segments without checking LTV is optimizing for efficiency at the expense of profitability.
Before pausing any segment, pull its LTV from the CRM. High CPA might mean expensive to reach, not bad customers.
Build a CAC:LTV table by segment. Sort by ratio, not CAC alone.
No LTV data? Proxy with average contract value and estimated retention. Imperfect beats blind.
CAC without LTV is half an equation. The advertisers scaling fastest aren’t the ones with the lowest CPA, they’re the ones who know exactly how much a customer is worth and bid accordingly.
📊 Meta and Google Both Reported Q1 Earnings and the Numbers Were Big
Meta hit $56 billion in revenue while Google nearly doubled its net income, but the more important story for marketers is what both companies signaled about where ads are heading next.
The Breakdown:
Meta Is Making More From Fewer Users - Daily active users dipped to 3.56 billion but revenue still grew 33%. Ad impressions rose 19%, and average ad prices climbed 12% year over year, reaching the same Meta audience is getting more expensive.
Instagram is Punishing Aggregator Accounts - Instagram is removing aggregator accounts from recommendations across photos and carousels, not just Reels. 75% of US recommendations already come from original posts; reposting other content is no longer a viable organic strategy.
Google had an Exceptional Quarter - Alphabet posted $109.9 billion in revenue, up 22% year over year, with net income nearly doubling to $62.58 billion. Search hit an all-time high in query volumes, and Google Cloud crossed $20 billion.
Gemini Is About to Get Ads - Google’s chief business officer confirmed openness to ads inside Gemini. Ads are already live in AI Overviews and AI Mode. Gemini is next with agency conversations underway since December 2025.
Meta’s cost base grew 35% as it poured money into AI infrastructure. For Instagram, posting original content for 30 days resets recommendation eligibility. Gemini users are already asking buying-intent questions, getting familiar with the format now puts you ahead of most advertisers.
Together with T-Mobile
Get 10 Voice Lines for $200 & $150 credit per new voice line*
Right now, pay just $20 line when you switch 10 or more lines on T-Mobile for Business CoreMobile plan.
Bring your device and keep your current numbers. Plus, get an additional $150/line back when you switch. No limit. Learn more now.
*10 lines for $200/mo; each additional line $20/mo./line with Autopay; plus taxes & $35 device connection charge. $150/line credit via one-time bill credit.
🗝️ Tweet of the Day
Advertise with Us
Wanna put out your message in front of over 50,000 best marketers and decision makers?
Checkout our Partner Kit here🤝
At Buyology, we care about our readers and want to provide the best possible experience. That's why we always look for ways to improve our content and connect with our audience. It would be amazing if you could hit us up with feedback about our content or absolutely anything, we are always up for a chat 🥰
Thanks for your support, We'll be back with more such content 🥳