Money & metrics · also called breakeven, break-even CPC, break-even ROAS
Break-even point
The break-even point is where revenue exactly equals cost, so a campaign makes neither profit nor loss.
Break-even is the line between a campaign worth keeping and one worth stopping. In search arbitrage it is most useful as a price: the most you can pay for a visitor without losing money.
In the simplest form, break-even CPC equals revenue per visit (RPV). If a visitor earns $0.27 on average, any click bought for less than $0.27 is profitable and anything above it loses.
The honest version subtracts what the simple version ignores. Reduce revenue by the deductions you expect between estimated and final figures (see clawback). Reduce it again for clicks that are paid for but never load. Add percentage costs such as agency or tracker fees to the cost side. What is left is a lower, safer ceiling. Operators then set bids, cost caps and automation rules against that adjusted number, not the optimistic one. Expressed as ROAS, break-even is 100% before adjustments and noticeably more after them.
An example
Say RPV is $0.27 on estimated revenue. Expect 10% deductions: $0.243. Allow for 5% of paid clicks not arriving: $0.243 x 0.95 = $0.231. Agency fee of 4% on spend: $0.231 / 1.04 = $0.222. True break-even CPC is about $0.22, not $0.27.
Related terms
ROI (return on investment)
ROI is profit expressed as a percentage of what was spent: revenue minus cost, divided by cost.
RPV (revenue per visit)
RPV is total revenue divided by the number of visits to the landing page, showing what one arriving visitor is worth on average.
CPC (cost per click)
CPC is the price paid for one click on an ad; in search arbitrage it is what the arbitrageur pays a traffic source for each visitor.
The spread (margin)
The spread is the gap between what an arbitrageur earns from a visitor and what that visitor cost to buy.
Unit economics
Unit economics is the profit or loss on a single unit of the business, which in search arbitrage means one visitor or one click bought.
Clawback (revenue deduction)
A clawback is revenue a feed removes from a publisher's earnings after the fact, usually because clicks were judged invalid and the advertiser was refunded.