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Max CPC and break-even CPC: how to set bidding targets from margin

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

Updated 2026-01-28

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

What max CPC answers

Max CPC answers a simple question: how much can you pay per click and still hit your unit economics targets- It's derived from the max CPA you can afford and your click-to-conversion rate (CVR).

Core relationships

  • Contribution per conversion ~ AOV * contribution margin.
  • Break-even CPA = contribution per conversion.
  • CPA = CPC / CVR, so max CPC = target CPA * CVR.
  • If you buy impressions (CPM): CPM = CPC * CTR * 1000.

Best practices

  • Use click-based CVR when computing CPC targets (avoid denominator mismatch).
  • Add buffer for refunds/returns and tracking error; don't run at break-even.
  • For subscription businesses, prefer LTV-based targets rather than single-order AOV.

Common mistakes

  • Mixing session CVR with click CPC (inconsistent measurement).
  • Ignoring variable costs (fees, shipping, returns) and overstating margin.
  • Scaling based on short-window ROAS without incrementality validation.

FAQ

Should I set bids to max CPC-
Usually you bid below max CPC so you have buffer. Use max CPC as a ceiling and then optimize using marginal ROAS and incrementality as spend scales.
What if my funnel has multiple steps-
Convert CVR to 'click -> purchase' (or click -> customer) by multiplying stage conversion rates. Alternatively use a funnel calculator and LTV-based targets for more accuracy.

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