How to use this hub
Turn business constraints into bidding targets. Start with unit economics (margin and allowable CPA), translate CPA into max CPC using CVR, then set funnel targets (CTR/CVR/CPM) that reflect your actual placement mix.
The translation chain (economics -> bids)
| Step | Inputs | Output |
|---|---|---|
| 1 | AOV + contribution margin | Break-even CPA |
| 2 | Break-even CPA + CVR | Max CPC (break-even or target) |
| 3 | Max CPC + CTR (optional) | Implied max CPM |
| 4 | LTV + payback constraint | Target CPA that matches cash reality |
Where to focus (diagnosis)
- If max CPC is low: raise margin/AOV or raise CVR (landing/offers).
- If CPA is high: decompose into CPC and CVR; fix the worst lever first.
- If CPM is high: improve relevance and creative fit, or change placement mix.
- If CPL looks good but CAC is bad: improve lead quality and lead-to-customer rate.
Common mistakes
- Using session CVR while bidding on clicks (use click-based CVR where possible).
- Ignoring variable costs and returns (use contribution margin, not gross margin headlines).
- Setting targets without accounting for attribution noise and seasonality (add buffer).