Ads Profit Calculator
Quickly calculate if you're going to be profitable with advertising!
Not sure what each metric is? Read the guide
Website Metrics
Ads Metrics
Website Analysis
Campaign Projections
Tips & Warnings:
- 💡 A visitor will generate $3.00 of profit. It means you should avoid paying more than that for a click.
- 💡 It seems like ads could be profitable for you. If you can keep a consistent acquisition cost, you can scale your business with ads.
How We Calculate Your Net Profit
Here’s a simple, 3-step breakdown of the calculation using your numbers:
Clicks
Your $500 budget at $1.5 per click gets you...
Sales
With 333 clicks on your ad and a 2% conversion rate, you can expect around...
Profit
6 sales at $150 profit each is $900. Minus your $500 ad spend, you get...
net profit
What are those numbers?
Customer Acquisition Cost (CAC)
This is the total amount of money you spend to get one customer. If you spend $100 to get 10 customers, your CAC is $10.
Average Sale Value / Lifetime value
- If you have one-time purchases, this is how much customers spend on average (including repeated purchases).
- If you sell subscription, it's the total amount of revenue you get from one customer (ex: over one year).
Profit per sale
This is the amount of money you make on each sale. If you sell a product for $20, and you have $3 of costs, the profit per sale is $17.
Conversion rate
This is the %age of people who buy your product compared to the visitors. If you have 100 visitors, and 3 of them buy your product, your conversion rate is 3%.
Pricing Models
CPM (Cost Per 1000 impressions): You pay for every 1000 times your ad is shown. Common on Facebook, Instagram, Display Networks, and YouTube.
CPC (Cost Per Click): You only pay when someone clicks your ad. Common on Google Search, Bing, LinkedIn, and Twitter.
CPM (Cost Per 1000)
This is the cost per 1000 impressions. If you pay $10 for 1000 impressions, your CPM is $10.
CPC (Cost Per Click)
This is the amount you pay each time someone clicks on your ad. If you pay $100 for 100 clicks, your CPC is $1.
CTR (Click-through rate)
This is the percentage of people who click on your ad. If your ad get 1000 impressions, and 15 people click on it, the CTR is 1.5%. (Only relevant for CPM model)
Budget
This is the amount of money you want to spend on ads.
How to Calculate Ad Profitability
Most advertisers track the wrong metric. They obsess over ROAS or CPC in isolation — but a 5x ROAS can still lose money if your margins are thin. Ad profitability requires looking at the full picture: ad costs, conversion rates, and your profit per sale.
The calculator above models this entire chain. Enter your website metrics (conversion rate, customer value, profit per sale) alongside your ad metrics (budget, CPC or CPM, CTR) and it projects your net profit. If the number is red, you're losing money.
Your Break-Even Point
The most important number in ad profitability isn't your ROAS — it's your break-even CPC. That's the maximum you can pay per click while still making money.
Break-even CPC = Profit per Sale × Conversion Rate
If your profit per sale is $150 and your conversion rate is 2%, your break-even CPC is $150 × 0.02 = $3.00. Pay more than $3 per click and you lose money on every sale. The calculator shows this as "Max Cost per Click" in the Website Analysis section.
For a ROAS-based approach, use our ROAS Calculator which shows break-even ROAS based on your margins.
What Makes Ads Profitable
Ad profitability comes down to three levers, and the best campaigns optimize all three:
- Lower your cost per click. Better targeting, better creative, and higher Quality Scores reduce what you pay. Compare your CPC against benchmarks with our CPC Calculator.
- Increase your conversion rate. Landing page optimization, offer relevance, and audience targeting turn more clicks into customers. Even a 1% to 2% improvement doubles your revenue.
- Raise your customer value. Upsells, subscriptions, and retention strategies increase what each customer is worth. Check your numbers with our LTV Calculator.
The calculator shows projected profit for your specific numbers. Adjust any input to model different scenarios — lower your CPM, increase your conversion rate, raise your price — and see the impact on your bottom line instantly.
Frequently Asked Questions
How do I know if my ads are profitable?
Your ads are profitable when the revenue from ad-driven sales exceeds your total ad spend plus the cost of goods sold. The simplest check: if your net profit (shown in the calculator) is positive, you're making money. If it's negative, you're spending more on ads than you're earning back.
What ROAS do I need to be profitable?
It depends on your profit margins. If your margins are 50%, you need at least a 2x ROAS to break even. If margins are 25%, you need 4x. The formula is: Break-even ROAS = 1 ÷ Profit Margin. Use our ROAS Calculator to find your exact break-even point.
Why am I getting clicks but no sales?
Clicks without conversions usually mean a disconnect between your ad and your landing page. Common causes: the landing page doesn't match the ad's promise, poor user experience, weak call-to-action, or targeting the wrong audience. Focus on conversion rate optimization — even small improvements have a huge impact on profitability.
Should I use CPM or CPC billing?
Use CPC when you want to pay only for clicks (best for direct response campaigns). Use CPM when you're optimizing for reach or have a high CTR that makes impression-based pricing cheaper per click. The calculator supports both models — switch between them to compare projected profitability.
How many clicks do I need for reliable data?
At minimum, aim for 500+ clicks before making decisions based on your data. With a 2% conversion rate, 500 clicks should yield ~10 conversions — enough to spot clear patterns. The calculator warns you when your projected click volume is too low for statistically meaningful results.
How do I calculate Customer Acquisition Cost?
CAC = Total Ad Spend ÷ Number of Customers Acquired. If you spent $1,000 and got 10 customers, your CAC is $100. For this to be sustainable, your CAC must be lower than your profit per customer. Track your full customer value with our LTV Calculator.
How do you calculate ad spend?
Ad spend is the total money paid to advertising platforms. Add up costs across all channels: if you spend $500/month on Facebook Ads and $300/month on Google Ads, your total monthly ad spend is $800. For a true profitability picture, also factor in creative production and any agency fees — the calculator's "Ad Budget" field should reflect your total platform costs.
Is $500 enough to start advertising?
Yes, for testing. At a $1.50 CPC, $500 buys ~333 clicks. With a 2% conversion rate, that's ~6 sales. Enter those numbers in the calculator above to check if 6 sales cover your $500 spend. The general rule: aim for at least 500 clicks before making optimization decisions, so a $500 budget works if your CPC is $1 or less. Higher CPCs may need a larger test budget.
What is the difference between ROAS and ROI?
ROAS (Return on Ad Spend) = Revenue ÷ Ad Spend — measures how much revenue your ads generate. ROI (Return on Investment) = (Profit − Total Costs) ÷ Total Costs — measures overall profitability including all expenses. A campaign can have a high ROAS but low ROI if non-ad costs are high. This calculator models net profit, which is closer to ROI. For ROAS-specific analysis, use our ROAS Calculator.