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Return on Ad Spend
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CAC
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$30$35$40$45$50
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Marketing Spend$1,000,000$1,933,333$1,657,143$1,450,000$1,288,889$1,160,000
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$2,000,000$3,866,667$3,314,286$2,900,000$2,577,778$2,320,000
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$3,000,000$5,800,000$4,971,429$4,350,000$3,866,667$3,480,000
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$4,000,000$7,733,333$6,628,571$5,800,000$5,155,556$4,640,000
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$5,000,000$9,666,667$8,285,714$7,250,000$6,444,444$5,800,000
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Revenue
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CAC
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$30$35$40$45$50
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Marketing Spend$1,000,000$6,444,444$5,523,810$4,833,333$4,296,296$3,866,667
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$2,000,000$11,047,619$9,469,388$8,285,714$7,365,079$6,628,571
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$3,000,000$15,675,676$13,436,293$11,756,757$10,450,450$9,405,405
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$4,000,000$20,350,877$17,443,609$15,263,158$13,567,251$12,210,526
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$5,000,000$24,786,325$21,245,421$18,589,744$16,524,217$14,871,795
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EBITDA
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CAC
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$30$35$40$45$50
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Marketing Spend$1,000,000$611,111$380,952$208,333$74,074-$33,333
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$2,000,000$761,905$367,347$71,429-$158,730-$342,857
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$3,000,000$918,919$359,073-$60,811-$387,387-$648,649
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$4,000,000$1,087,719$360,902-$184,211-$608,187-$947,368
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$5,000,000$1,196,581$311,355-$352,564-$868,946-$1,282,051
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Assumptions
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AOV$58
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EBITDA Margin (Excluding Marketing Spend)25%
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Marketing / Sales - at $1M in spend*30%
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Marketing / Sales - at $2M in spend*35%
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Marketing / Sales - at $3M in spend*37%
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Marketing / Sales - at $4M in spend*38%
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Marketing / Sales - at $5M in spend*39%
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*Marketing / Sales assumes that as you ramp marketing spend, revenue attributable to marketing spend will increase as a share of total revenue. In other words, diminshing returns to non-paid channels as you ramp spend - diminishing returns rears its ugly head again
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