Somebody spent four thousand dollars, got two leads, and concluded the channel does not work. The channel worked exactly as it always does. The arithmetic was never going to add up, and it could have been checked in ten minutes.
Cost per click, divided by conversion rate, gives you cost per lead. Multiply by how many leads it takes to make a sale and compare with what a customer is worth. If that comparison fails, no amount of optimisation rescues it.
It puts you in front of people already searching for what you sell. If nobody searches for your thing, there is nothing to buy, and the money belongs somewhere that creates demand instead.
In a large controlled experiment on their own account, eBay found that turning off branded search ads cost them very little traffic, because most of it arrived through the free listing instead. It is one company and one context, and it is still the most rigorous public test of the question anyone has run.
High customer value, a clear buying intent people type into a search box, and a page that can convert. When those three line up, paid search is often the fastest channel there is, and the honest version of this page is that most of the businesses reading it do not have all three.
"Are Google Ads worth it" has no general answer, and anybody who gives you one is selling something. It has a specific answer, and it takes three numbers you already know: your cost per click, your average order value, and your gross margin.
Below is the conversion rate at which paid search breaks exactly even, at a 30% gross margin. Above the number in your cell, you profit. Below it, you fund Google.
| Cost per click | $50 order | $150 | $400 | $1,000 | $3,000 |
|---|---|---|---|---|---|
| $0.50 | 3.33% | 1.11% | 0.42% | 0.17% | 0.06% |
| $1.00 | 6.67% | 2.22% | 0.83% | 0.33% | 0.11% |
| $2.00 | 13.33% | 4.44% | 1.67% | 0.67% | 0.22% |
| $5.00 | 33.33% | 11.11% | 4.17% | 1.67% | 0.56% |
| $10.00 | 66.67% | 22.22% | 8.33% | 3.33% | 1.11% |
| $20.00 | — | 44.44% | 16.67% | 6.67% | 2.22% |
| $40.00 | — | 88.89% | 33.33% | 13.33% | 4.44% |
Read one cell and the argument usually ends. At a $2 click and a $400 order, you break even at 1.67%. Most competent landing pages clear that, which is why paid search works for mid-ticket businesses.
Now read the top left. At a $2 click and a $50 order, you need 13.33% of clicks to become sales. Almost nothing converts at 13%. That corner of the table is where most of the "Google Ads does not work for us" stories come from, and the ads were never the problem: the arithmetic was impossible before the first campaign was built.
The dashes are not rounding. They mark combinations where break-even requires converting more than every click you buy.
Method: break-even conversion = cost per click ÷ (average order × gross margin). At margins other than 30%, scale inversely: at 15% margin every number doubles, at 60% it halves. This ignores repeat purchase, which moves the threshold in your favour and is the single strongest argument for paid search when you have it.
This is teaching material and our own reading of public documentation, not advice for your specific account. Check anything important with your own specialist before you act on it.
Run the calculator, then tell us what it showed. We reply with what to fix first and why. No call, no pitch.
Anything unfamiliar above is defined in the Google Ads glossary. Three accounts taken apart, ending with the money, are in the case studies, and the longer pieces are on the blog.