Stop Blaming CPM... This 1 Formula Tells You If You Can Scale

Not Using This Formula Will Prove You Lose Money With Every Click OR Have Room For More Volume

Do you know what you can afford to pay for a click?

Most brands that scale on ROAS or CPA miss the one formula that determines whether scaling is profitable or just looks good on paper.

You might be hitting your targets while quietly losing money on every visitor. Or worse, losing out on profit by playing too conservatively.

In this episode of The Scaling Lab, Jairet breaks down Allowable CPC
(aCPC) and how it reframes scaling decisions through unit economics instead of surface-level metrics. You’ll walk away with a clearer understanding of where your growth ceiling actually is and what needs to change to scale.

Key Takeaways

Understand if scaling is actually viable for your brand.
Learn the formulas behind calculating what you can afford to pay per click
Improve your ability to compete in ad auctions by increasing your economic ceiling
Discover why optimizing toward ROAS or CPA alone can hide unprofitable growth
Unpack the difference between AOV-based and LTV-based decision making
Explore why conversion rate and AOV are the real levers behind scalable growth
Build a clearer framework for prioritizing optimization efforts across your funnel

Connect

Book a strategy consultation: https://triedandtruemedia.com/book-consultation/

Listen Now

FAQ

What is allowable CPC and why does it matter?
Allowable CPC is the maximum amount you can afford to pay for a click while still hitting your profitability targets. It matters because it directly determines whether scaling your ad spend will generate profit or losses.

How is allowable CPC calculated?
For ROAS-based brands, it is calculated using AOV multiplied by conversion rate, divided by target ROAS. For CPA-based brands, it is target CPA multiplied by conversion rate. Subscription brands often replace AOV with LTV for more accurate modeling.

Why not just optimize for lower CPMs?
CPMs are largely outside your control. Focusing on them often leads to marginal gains. Increasing conversion rate and AOV has a compounding effect and can even indirectly improve CPMs through better engagement signals.

Should I use AOV or LTV in my calculations?
If your business relies on repeat purchases or subscriptions, LTV provides a more accurate picture of what a customer is worth. Using only AOV can underestimate your allowable CPC and limit your ability to scale.

What does a positive or negative CPC gap mean?
A positive gap means your actual CPC is below your allowable CPC, giving you room to scale. A negative gap means you are overpaying for traffic and likely losing money on each click.