Break-even CPC calculator
If a conversion is worth 45 in gross profit and three in every hundred clicks convert, each click is worth 1.35 to you. Bid anything under that and the campaign makes money; bid over it and it does not, no matter how good the ROAS looks in the interface. Every other bidding decision is a refinement of this one line.
Break-even CPC is gross profit per conversion multiplied by conversion rate. A 45 profit at a 3% conversion rate makes each click worth 1.35 — that is the ceiling on what you can bid before the campaign stops paying.
How to find your maximum bid
This one line explains why two advertisers bidding on the same keyword can rationally pay very different amounts. A business with a 40% conversion rate on high-margin services can outbid one converting at 2% on thin retail margins by a factor of twenty, and neither is wrong. It also shows where the real leverage sits: raising conversion rate raises the ceiling proportionally, which is usually easier and cheaper than winning an auction on price alone.
Questions
Multiply gross profit per conversion by the conversion rate. A 50 profit at 4% gives a 2.00 break-even click.