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Revenue per click (RPC)

Revenue per click is the average revenue that one ad click brings in.

How it works

Revenue per click combines two numbers: the conversion rate, or how often a click ends in an order, and the average order value, or how much an order is worth. Divide revenue per click by cost per click and you get ROAS. So it links what a click costs to what it earns. Multiplied by the gross margin, it shows how much a product, a category or a campaign can afford to pay for a click (how revenue per click explains ROAS).

There is no single benchmark: it depends on the price level of the catalogue and on how well the site sells.

Formula

Revenue ÷ clicks = conversion rate × average order value

Where you see it

The Google Ads API reports conversion value per interaction (conversions_from_interactions_value_per_interaction). For text and Shopping ads, an interaction is a click, so for these ads the field shows revenue per click as Google Ads counts it.

Example

Example store, not client data.

The tableware shop got 180,000 in revenue from 8,000 clicks. Revenue per click = 180,000 ÷ 8,000 = 22.5. The parts give the same figure: a 3.75% conversion rate × an average order value of 600 = 22.5.

A click costs 5 on average, so ROAS = 22.5 ÷ 5 = 4.5. With a 35% gross margin, a click leaves 22.5 × 0.35 = 7.88 of gross profit. That is the break-even CPC: a click that costs more loses money.

Not to be confused with

  • Cost per click — what a click costs. Revenue per click is what it brings back; ROAS is the ratio of the two.
  • Average order value — revenue per order. Revenue per click also counts the clicks that ended without an order.

Right and wrong readings

  • Wrong: “Cost per click rose from 5 to 6, so ROAS will fall.” Right: ROAS = revenue per click ÷ cost per click. If revenue per click rose from 22.5 to 27 at the same time, ROAS stays at 27 ÷ 6 = 4.5.

Sources