The 3 Numbers Standing Between You and Profit (+ The Ultimate Calculator)

I’ve tried to quit this newsletter 4 times.

But apparently, when you tell thousands of marketers you’re going to show up weekly, some of them actually hold you to it.

So here we are.

I’m Isaac. I run an ad agency. I teach digital advertising. I overthink everything.

This newsletter is where I write about what’s actually working in our client accounts, what we’re building inside AdVenture Academy, and the strategic frameworks I’d be teaching in a one-on-one if I had the time.

If you care about making your ad campaigns better, smarter, and more profitable — I think you’ll like it here.

This week, I want to talk about the three numbers that determine whether your business model is rock solid or slowly imploding.

I'm here to teach you how to get more profit out of every campaign.

Today, we’re diving into the one thing every business needs to understand...

The Unit Economics of Your Business

(aka: Does your business make sense on paper before you scale it?)

This is how we make decisions at the agency.
And once you understand it, it’ll change how you look at every number in your dashboard.

Let’s Start With This

If you want to make money, you have to know these 3 numbers cold:

Cost Per Session
Conversion Rate
Average Order Value

Together, they determine how much you can spend to acquire a customer — and whether it’ll be profitable when you do.

Let’s break them down.

1. Cost Per Session (CPS)

This tells you how much you’re paying to get one person to your site — regardless of where they came from.

Formula:
Total marketing spend ÷ Total sessions = Cost Per Session

So if you spent $2,000 and got 4,000 sessions:
$2,000 ÷ 4,000 = $0.50 per session

That’s great. But if you spent the same and only got 1,000 sessions?

Now your CPS is $2.00—and your margin just got squeezed.

There are two ways to lower this number:

A) Increase your non-paid traffic

More SEO traffic, more email clicks, more referral or direct visits = lower blended CPS.

Every free session makes your paid sessions cheaper.

B) Work your ad strategy to bring CPC down

If your paid traffic is too expensive, you need to optimize your CPC (Cost Per Click):

Refine your targeting
Test multiple creative variations
Improve ad relevance and engagement
Use click-to-Messenger or lead gen ads if they’re more cost-efficient
Eliminate low-performing placements

Example:
If your Meta CPC is $2.50 and you get a 2% CTR,
Try testing a punchier hook and bringing that CPC down to $1.80.

Now your same budget gets you more people, which gives your conversion rate more opportunities to win.

More efficient traffic = more profit without more spend.

2. Conversion Rate (CVR)

How many of your visitors are taking the action you want them to?

Formula:
Number of conversions ÷ Number of sessions = Conversion Rate

So if 100 people visit your site and 3 of them buy:
3 ÷ 100 = 3% conversion rate

This number is sacred.
It tells you how well your site, your offer, and your messaging are working.

Ways to improve it:

Sharpen your product description
Shorten checkout
Add social proof
Increase urgency
Price test
A/B test headlines or offer framing
Match the ad message to the landing page

Even a 1% bump can mean thousands in added revenue over time.
And if you're bringing traffic but not seeing sales, this is the first place to look.

3. Average Order Value (AOV)

How much money are you making per order?

Formula:
Total revenue ÷ Total orders = AOV

If you made $10,000 from 100 orders:
$10,000 ÷ 100 = $100 AOV

Higher AOV = more revenue per customer = more room to spend on traffic.

Ways to increase AOV:

Offer bundles
Add post-purchase upsells
Add free shipping thresholds
Cross-sell related products
Introduce a premium version

Even small changes — $5 more per order — can unlock massive scale.

Pulling It All Together: The Math That Tells the Truth

Let’s say:

Cost Per Session = $1.50
Conversion Rate = 2%
AOV = $90

Here’s how it plays out:

For every 100 sessions, you spend: 100 x $1.50 = $150
At a 2% CVR, 2 people buy
Total revenue = 2 x $90 = $180

$180 in revenue - $150 in ad spend = $30 leftover

Now subtract your cost of goods, shipping, software, team, and overhead.
Still profitable? Great.
In the red? You’ve got work to do.

Don’t Forget: Fixed Costs vs. Variable Costs

Fixed Costs = things you pay whether you sell 1 unit or 1,000
Examples:
‣ Rent
‣ Salaries
‣ Software
Variable Costs = costs that increase as you sell more
Examples:
‣ Product cost
‣ Packaging
‣ Shipping
‣ Payment processing fees

Your profit is whatever’s left after you pay for:

Your ads
Your fixed costs
Your variable costs

If your total CAC + total variable costs + your share of fixed costs per order is more than your AOV?
You’re losing money.

Here’s Why All This Math Matters

Every time something feels off — sales down, ROAS shaky, cash tight — this is where you look.

Example:
Sales dropped?
You pull up these three metrics.

If AOV dropped, maybe people are buying fewer add-ons.
If Conversion Rate dropped, maybe traffic quality changed or your offer lost urgency.
If CPS increased, maybe your ad relevance is off or your budget’s not pacing well.

And if those numbers aren’t ones you can realistically move — then your job is to adjust your costs and get honest about what lever you actually need to fix.

Now instead of guessing, you diagnose.
Instead of reacting, you optimize.

We’ve been running our unit economics — projecting different scenarios and crunching the numbers — to get a clearer picture of how AdVenture Academy should evolve. It’s helping us decide where to pivot, how to scale responsibly, and how to get the most valuable content in front of you, faster and smarter.

Grab FREE access to the unit economics calculator we've used over and over again to help scale our clients' businesses.

Explore it all here 👉 THE ULTIMATE UNIT ECONOMICS CALCULATOR

Next week, I’ll show you how we use this math to create profit ceilings, scale limits, and exactly how we plan our next 6 months of growth.

See you then.
—Isaac

P.S. There is a free trial to the All Access Pass. I don’t know who needs to hear this, but you don’t have to commit. You don’t have to pay anything. You don’t even have to wear socks.

You just click the thing. Watch the things. Become the person your campaign manager thinks you already are.

Or don’t. But if you run another broad-targeting campaign with no creative testing plan, I will find you, and I will… email you again. Probably with charts.