Email vs. Paid Ads: Cost‑per‑Revenue Dollar for Small Brands
For most founder‑led brands, email drives revenue at a fraction of the cost of paid ads. If you’re not tracking cost per revenue dollar (CPRD) across channels, you’re probably overspending on clicks and underspending on owned audiences.
Why “Cost per Revenue Dollar” Beats ROAS and CPA
ROAS (Return on Ad Spend) looks great on a dashboard but ignores creative costs, agency fees, and retention value.
CPA (Cost per Acquisition) stops at the first purchase.
CPRD asks: “How many dollars do I have to spend to make one dollar in revenue on this channel?” It bakes in both cost and revenue, and works for any channel—email, Meta ads, Google, affiliates, influencers.
Formula:
CPRD = Total Channel Cost / Total Channel RevenueLower = better. A CPRD of $0.12 means you spend 12¢ to earn $1.
Your mileage varies—plug your numbers into the calculator below.
The Real Costs You Must Include
ESP / CDP fees (Klaviyo, Omnisend, Mailchimp)
Creative/strategy (internal time or agency retainer/pay‑per‑email)
Deliverability tools (ZeroBounce, warm‑up tools) if cold prospecting
Paid Ads
Media spend (obvious)
Creative production (video, UGC, design)
Agency or freelancer fees (percentage of spend or flat)
Software (tracking, attribution, landing page builders)
Hidden costs are why ROAS looks good but cash flow doesn’t.
Build Your CPRD Calculator (Copy This Sheet)
Create a tab for each channel.
Add rows for Costs (ad spend, fees, tools) and Revenue (attributed sales for the same period).
Sum costs; sum revenue; divide.
Track monthly and rolling 3‑month CPRD to smooth spikes.
Columns to include: Month | Costs | Revenue | CPRD | Notes (promo, algorithm change, new flow)
Want an editable Google Sheet? Drop us a line—we’ll send ours.
90‑Day Plan to Drop Your CPRD
1. Max Out “Always‑On” Email Automations (Week 1‑3)
Welcome, Abandoned Cart, Post‑Purchase, Win‑Back = the “Revenue 4.”
Add cross‑sell logic and time‑based splits to increase Average Order Value (AOV).
2. Increase Campaign Cadence Strategically (Week 4‑8)
Move from 1–2 to 4–8 sends per month.
Use segmentation (VIPs, non‑buyers, dormants) to keep unsubscribes low.
3. Optimize List Growth (Week 4‑12)
Test pop‑up incentive (10% off vs. quiz vs. gift with purchase).
Add post‑purchase checkboxes and transactional opt‑ins.
4. Trim Paid Waste (Ongoing)
Pause ad sets with CPRD higher than email by >3x unless they drive net new customers you can nurture.
Shift budget into winning segments, creatives, or LTV‑positive retargeting.
When Paid Ads Still Make Sense
Email is a retention and activation monster, but you still need acquisition. Paid ads are great for:
Launching into new audiences fast.
Feeding your list with fresh, qualified traffic when organic slows.
Testing messages quickly (learn which angles to roll into email).
Just ensure your email machine is ready to monetize that spend—otherwise CPRD balloons.
Case Snapshot (Composite of Small Brands)
Brand A: $80k revenue / month.
Email: $1,600 costs (ESP $600 + creative $1,000) → $32,000 revenue → CPRD = $0.05
Meta Ads: $20,000 spend + $2,500 creative = $22,500 cost → $60,000 revenue → CPRD = $0.375
Takeaway: Meta ads were vital to feed top‑of‑funnel. But by shifting 10% of ad budget to email builds (flows, pop‑ups), Brand A cut email CPRD further and improved overall MER (marketing efficiency ratio).
Key Metrics to Watch Besides CPRD
Revenue per Recipient (RPR) for email
Click‑to‑Purchase Rate instead of CTR or Open Rate
MER (Total Revenue / Total Marketing Spend) for the full picture
List Growth Rate and Churn (unsubs + spam %) / month
FAQs
Isn’t email “free” once I have a list?
No. ESP fees scale, and content takes time. But compared to paid clicks, marginal costs are tiny.
How do I attribute revenue to email fairly?
Use ESP attribution for automated flows, UTM tags for campaigns, and triangulate with GA4 or third‑party attribution.
What if my list is small?
Even a 1,000‑person list can generate predictable revenue with the right flows. Start now—list growth compounds.
What CPRD should I aim for?
Email: under $0.10. Ads: whatever still yields profit after LTV. Track month‑by‑month.
Want a Free Audit?
Milhook specializes in turning email into a 20–40% revenue driver for founder‑led brands—starting at budgets small teams can afford. We’ll a mini audit of your flows, free. Contact us today.