Log in with GooglePPC (pay-per-click)
PPC (pay-per-click) is an online advertising pricing model in which the advertiser pays each time someone clicks an ad, not each time the ad is shown.
By Berend Vrakking, founder of Product Metrics. Updated 27 October 2026.
Formula
Ad spend = clicks × average cost per click (CPC)
Average CPC is what the clicks actually cost, divided by their number. What the clicks earn back is a separate measure: ROAS (revenue ÷ ad spend) or POAS (contribution profit ÷ ad spend).
Example
| Step | Value |
|---|---|
| Impressions | 40,000 |
| Clicks (click-through rate 2.5%) | 1,000 |
| Ad spend (1,000 × €0.50 average CPC) | €500.00 |
| Orders (conversion rate 2%) | 20 |
| Revenue (20 × €75.00) | €1,500.00 |
| ROAS (€1,500.00 ÷ €500.00) | 3 |
| Contribution at a 30% margin (€1,500.00 × 30%) | €450.00 |
| POAS (€450.00 ÷ €500.00) | 0.9 |
| Break-even ROAS (1 ÷ 30%) | 3.33 |
Each click cost €0.50 and the campaign returned a ROAS of 3, yet it lost €50.00. At a 30% contribution margin the products needed a ROAS of 3.33 to break even, which is a POAS of 1. Illustrative data.
Put it into practice
- Calculate it: Break-even ROAS calculatorApply the definition to your products.
- Read the guide: POAS vs ROASWork through the concept in more detail.
For one product, and for an account
In Google Ads, a shop advertises its products mainly through Shopping ads and Performance Max. Google charges Shopping ads per click, and they appear on the Shopping tab, next to Google Search results and in Google Images. Performance Max is a campaign type, not another word for PPC: one campaign can serve on Search, Shopping, YouTube, Display, Discover, Gmail and Maps.
An account total hides the products. One average CPC and one ROAS for the account mix products that pay for their clicks with products that lose money on every sale, because each product has its own margin and so its own break-even ROAS.
Product Metrics leaves the auction, bids and budgets to Google Ads. It writes each product’s segment to a Merchant Center custom label, so you can give a group of products higher or lower priority in your campaigns. Full Signal Tracking sends the profit of each order to Google Ads and Meta, so bidding can aim at what a click earns, not only the revenue it brings.
Common mistake
Calling every paid ad PPC. Google Ads also sells impressions (CPM and viewable CPM) and video views (CPV). A campaign billed per thousand impressions is paid advertising but not pay-per-click, and its cost per click is worked out afterwards rather than paid.
Questions
Is PPC the same as Google Ads?
What decides where a PPC ad shows in Google?
How much does a PPC click cost?
Keep reading
- Return on ad spend (ROAS)The revenue a click brings back per euro of ad spend.
- Smart BiddingHow Google Ads sets the bid in each auction for you.
- Performance MaxThe Google Ads campaign type that serves across Search, Shopping, YouTube and more.
- Google Ads Auction InsightsSee which advertisers you meet in the same auctions, and how often you outrank them.
- Google Shopping ads for beginnersSet up Shopping ads, the click-priced ads that show your products.
- Ecommerce PPC by product profitJudge each product by its margin and break-even ROAS, not the account-wide ROAS.
- PPC researchCheck keywords, competitors and the break-even CPC before you pay for a click.
- Product SegmentationSee each product in one of six segments, by volume and return.
- Full Signal TrackingSend profit to Google Ads and Meta, so bidding aims at what a click earns.