Mode 5 of 5
Break-even CPC
By Oliver Wakefield-Smith, Digital Signet. Updated July 2026.
Break-even CPC is the click price at which the average click exactly pays for itself: profit per customer multiplied by conversion rate. Above it, ads lose money even when they look busy.
The worked example
Worked slip
At a 5% conversion rate, 20 clicks make one customer. If those 20 clicks cost £7.50 each, you spent £150 to earn £150 profit: exactly break-even. Every penny of CPC below £7.50 is margin.
Two inputs people get wrong
Use gross profit per job or order, not revenue. A £600 boiler repair with £400 of parts and labour is £200 of profit; £200 is the input. And use a measured conversion rate where you have one; the 2026 cross-industry search average of 8.18% LocaliQ, 2026 data is a starting default, not a promise.
Leave a safety factor. Bidding right at break-even means a normal bad fortnight runs at a loss. Many advertisers cap bids at half to two-thirds of break-even; that is judgement, not a benchmark.
Companion reading: what is a good CPC uses this exact maths in prose, and the ecommerce benchmark page shows where it bites hardest. See also clicks to customers and the max CPC mode.