What is a good ROAS for PPC?

It depends entirely on margin. A 4x ROAS on a 20% margin product barely breaks even, while a 2x ROAS on a 60% margin product is comfortably profitable. ROAS alone is not a profitability metric — it must be read against margin, not against a generic industry benchmark.

How do you calculate break-even CPA?

Break-even CPA equals the profit margin per order in currency terms: average order value multiplied by margin percentage. If an £80 order carries a 40% margin, the break-even CPA is £32 — spending more than that to acquire the customer produces a net loss even though revenue was generated.

Should I include shipping and returns in margin?

Yes. Margin should reflect true contribution profit after cost of goods, shipping, payment processing and expected return rate, not just gross retail margin. Using an inflated margin figure overstates break-even CPA and leads to overspending on acquisition.

Does this account for repeat purchases or lifetime value?

No, the calculation is based on a single transaction. For businesses with strong repeat purchase rates, break-even CPA on first order alone understates what a campaign can afford — factor in customer lifetime value separately when deciding how aggressively to bid.

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PPC ROI Calculator

Enter monthly spend, CPC, conversion rate, order value and margin to see whether a campaign is actually profitable.

Monthly spend ($)

Average CPC ($)

Conversion rate (%)

Average order value ($)

Gross margin (%)

Clicks / mo

2,000

Conversions / mo

Revenue / mo

$7.2K

Gross profit / mo

$-1.4K

ROAS

144%

CPA

$83.33

Break-even CPA

$60.00

Break-even conversion rate

4.17%

Your current CPA is above break-even — this campaign is losing money at today's conversion rate and margin.

In short

A PPC ROI calculator takes monthly spend, average CPC, conversion rate, average order value and profit margin, then derives clicks, conversions, revenue, return on ad spend (ROAS) and net profit for the campaign. It also calculates the break-even cost per acquisition — the maximum CPA a campaign can sustain before it stops being profitable — which is the figure that determines whether a given conversion rate and order value can support the bids required to win auctions.

Worked example

What the output looks like

Input: Spend: £5,000 · CPC: £1.20 · Conversion rate: 3% · Average order value: £80 · Margin: 40%
Output: Clicks: 4,167 · Conversions: 125 · Revenue: £10,000 · ROAS: 2.0x · Gross profit: £4,000 · Net profit after spend: -£1,000 · Break-even CPA: £32
How to read it: A 2.0x ROAS looks reasonable but the campaign is actually losing £1,000, because the 40% margin means each £80 order only returns £32 of profit — less than the £40 it costs to acquire (£5,000 ÷ 125). The conversion rate or CPC needs to improve before scaling spend.

How it works

Enter spend, CPC and conversion rate

Monthly spend divided by CPC gives estimated clicks; clicks multiplied by conversion rate gives estimated conversions. These three inputs alone determine acquisition volume before profitability is considered.

Add average order value and margin

Conversions multiplied by average order value gives revenue; applying your margin percentage gives gross profit before ad spend is deducted, which is then subtracted to give net profit.

Compare break-even CPA to your actual CPA

Break-even CPA is margin per order — the most you can spend to acquire one customer and still break even. If your actual cost per acquisition (spend ÷ conversions) exceeds it, the campaign is losing money regardless of how healthy ROAS looks on paper.

What this tool does

Calculates clicks, conversions, revenue and profit from five inputs
Returns ROAS and profit margin after ad spend, not just revenue
Computes the maximum break-even CPA a campaign can sustain
Instantly re-runs when you adjust CPC or conversion rate assumptions

Questions

Frequently asked

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