What makes up your customer acquisition cost or CAC for short?
The correct answer is 1. Your CAC is made up of how much it cost you to get a user to click on an ad, and then your conversion rate. As in, how many of those people who clicked turned into a paying customer. Imagine it costs you 1$ to get a click on an ad, but only 1 out of every 100 who click converts into a paying user. Your CAC would be $100.