Separate PPC acquisition efficiency from profitability. Enter ad spend, clicks, website conversion rate, conversion-to-customer rate, customer value, gross margin, and management fees.
Pick your assumptions
- Return on ad spend
- 3.24:1
- Profit-based ROI
- 97.2%
Acquisition efficiency
- Cost per click
- $3
- Cost per website conversion
- $96
- Customer acquisition cost
- $160
- Break-even customer acquisition cost
- $315
Profitability
- Revenue
- $32,400
- Profit after direct costs
- $22,680
- Profit after PPC cost
- $11,180
- Break-even ROAS
- 1.64:1
How to calculate PPC ROI and ROAS
Website conversions equal clicks × website conversion rate. Customers equal conversions × conversion-to-customer rate. Revenue equals customers × customer value, and contribution profit equals revenue × gross margin. ROAS remains gross revenue ÷ ad spend; profit-based ROI compares contribution profit with total PPC cost.
PPC break-even ROAS and customer acquisition cost
Bars show gross revenue, profit after direct costs, and total PPC cost. Break-even customer acquisition cost equals customer value × gross margin. Break-even ROAS accounts for management fees and margin.
Frequently asked questions
How is PPC ROI calculated?
Profit-based PPC ROI equals (contribution profit − total PPC cost) ÷ total PPC cost. Contribution profit is revenue × gross margin. Total PPC cost includes ad spend plus agency or management fees.
What is the difference between ROAS and ROI?
ROAS is gross revenue ÷ ad spend only. Profit-based ROI applies gross margin and subtracts total PPC cost, including management fees. ROAS can look strong while profit-based ROI is negative.
How are CPC and CPA calculated?
Cost per click equals ad spend ÷ clicks. Cost per website conversion and customer acquisition cost use total PPC cost (ad spend + management fees), divided by website conversions or paying customers. Invalid denominators show N/A.
What are break-even CPA and break-even ROAS here?
Break-even customer acquisition cost is customer value × gross margin. Break-even ROAS is total PPC cost ÷ (ad spend × gross margin).
What happens with zero ad spend or zero total cost?
If ad spend is zero, ROAS and break-even ROAS show N/A, but profit-based ROI can still calculate when management fees create total cost. If total PPC cost is zero, ROI, CPC, cost per conversion, and customer acquisition cost show N/A while revenue and contribution can still display. A 0% gross margin is valid and produces $0 contribution profit; break-even ROAS then shows N/A.