The honest version includes all sales and marketing costs, including salaries and commissions, not just advertising. The flattering version counts only paid media, which can understate CAC by a factor of three.
CAC rising faster than customer-lifetime-value is the standard sign that a growth model is hitting saturation, and it typically shows up a year or two before revenue growth slows.
Example: Northwind Cloud spends $61M on sales and marketing and adds 14,900 customers, a CAC of $4,100. Two years earlier it was $2,950, so the cost of growth has risen 39%.
Related: customer-lifetime-value, cac-payback-period, unit-economics, churn-rate, sg-and-a