Break-even CPM: how to price impressions from CTR, CVR, and margin

A practical guide to break-even CPM: translate CTR, CVR, AOV, and contribution margin into a max CPM and a target CPM with buffer.

Updated 2026-01-28

Try it in a calculator

Break-even CPM Calculator

Example: 1.5% CTR, 2.5% CVR, $80 AOV, 40% margin, 20% buffer

Why break-even CPM matters

If you buy impressions, your economics flow through CTR and CVR. Break-even CPM tells you the maximum cost per 1,000 impressions you can pay while still breaking even on variable economics.

Core math

Clicks/1000 = 1000*CTR.
Conversions/1000 = clicks/1000 * CVR = 1000*CTR*CVR.
Contribution per conversion ~ AOV * contribution margin.
Break-even CPM = conversions/1000 * contribution per conversion.

Best practices

Use click-based CVR if you're using click-based CTR.
Add a profit buffer; don't operate at break-even.
Validate incrementality as spend scales (attribution can overstate value).

FAQ

How do I choose CTR and CVR inputs-

Start with observed averages for the same placement mix. Then run scenarios: small changes in CTR or CVR can materially change break-even CPM.

How does this relate to CPC-

They're linked: CPM ~ CPC * CTR * 1000. If you know your max CPC and CTR, you can infer a max CPM and vice versa.

More in paid ads

Paid ads bidding & budgeting hub: max CPC, target CPA, and break-even targets

A practical hub for bidding and budgeting: compute max CPC from CVR and margin, set target CPA using LTV, and use break-even CTR/CVR/CPM targets to guide creative and landing optimizations.

Creative + landing page playbook: diagnose CTR/CVR, then set break-even targets

A practical playbook for improving paid ads performance: use CTR/CVR diagnosis, set break-even CTR/CVR/CPM targets from your economics, and fix the biggest lever first.

CPC (Cost Per Click): definition, formula, and how to calculate

CPC explained: what cost per click means, how to calculate it, and how CPC connects to CTR, CVR, and CPA.

← Bookings vs ARR: definitions, formulas, and examples

Break-even CTR: required CTR at a given CPM (with buffer) →