Ad break-even for digital products
Digital products have near-100% margins, so almost the whole price is available to buy traffic — but only if the landing page converts.
At a $39 price, 96% margin and a 2% landing page conversion rate, you can pay up to about $0.75 per click or $37 per acquisition and still break even. Break-even ROAS is roughly 1.04x.
Run your own numbers
Max CPC
$0.73
Break-even bid per click
Max CPA
$36.32
Contribution per sale
Break-even ROAS
1.07x
At $0.60 per click your cost per sale is $30.00, leaving $6.32 profit per sale. You have headroom up to $0.73 per click.
Keep these numbers
Export the result, send it to whoever needs to approve the price, or get the next calculator and pricing playbook by email.
Conversion rate sets your bid
Max CPC is contribution per sale multiplied by conversion rate. Doubling landing page conversion doubles what you can bid, which is usually cheaper than out-bidding competitors.
Cold traffic to a product page converts at 0.5-2%. If you're modelling 5%, check that the number came from your own analytics and not from warm email traffic.
Break even only if you monetise after
Bidding to break even works when a bundle upgrade, membership or email sequence earns more later. Without that, target 1.5-2x break-even ROAS so ads still fund the business.
Questions
- What ROAS should I target for a digital product?
- Break-even sits near 1.05-1.15x thanks to high margins, but aim for 1.5-2x so there's profit after refunds and variance.
- Should I send ads to a product page or a lead magnet?
- Test both. A free tool or lead magnet gets a much cheaper conversion but delays revenue, so compare on 30-day value, not day one.
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