Paid Media Profitability Calculator

Break-even CPA & Max CPA Calculator

Calculate how much you can afford to spend acquiring a customer before advertising becomes unprofitable.

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Customer Economics

Use your actual margins rather than revenue alone to estimate a realistic maximum CPA.

Average revenue generated per order.
Revenue remaining after cost of goods sold.
Use 1 for first-order economics only.
Shipping subsidy, transaction fees, fulfilment or similar costs.
Desired profit as a percentage of customer revenue after ad cost.

What is break-even CPA?

Break-even CPA is the maximum amount you can spend acquiring a customer before the contribution generated by that customer is completely consumed by advertising cost.

Customer RevenueAOV × Expected Orders
Gross ProfitCustomer Revenue × Gross Margin
Break-even CPAGross Profit − Other Variable Costs
Target Max CPABreak-even CPA − Desired Profit

Example

Suppose an ecommerce customer has an average order value of 75, a 60% gross margin and makes one purchase.

75 × 60% =45 break-even CPA

If another 5 of variable cost is incurred per order, the practical break-even CPA falls to 40.

Why revenue-based CPA targets can be misleading

Revenue is not the same as profit. A campaign may appear profitable when comparing CPA against AOV while still losing money after product costs, fulfilment, payment fees and other variable expenses.

Using contribution margin gives paid media teams a more realistic ceiling for acquisition costs.

Important:This is a contribution-margin model, not a full accounting profit model. It does not automatically include overhead, tax, refunds, discounts, churn, financing costs or other business expenses unless you incorporate them into your assumptions.