The formulas
CPA = ad spend ÷ conversions
Max CPA = conversion value × margin
Max CPC = max CPA × conversion rate
Worked example
A plumber spends £500 on Google Ads, gets 400 clicks and 10 enquiries. CPC is £1.25, CPA is £50 and the site converts 2.5% of clicks. If an average job is worth £400 at a 30% margin, each enquiry is worth up to £120, so a £50 CPA is comfortable. The most the plumber can bid per click is £120 × 2.5% = £3. If a competitor pushes CPCs past that, the answer is a better landing page (raising the 2.5%), not a bigger bid.
Lead quality changes everything
If only one in four enquiries becomes a job, the max CPA drops to £30. Feed closed deals back into Google and Meta as offline conversions and the platforms will optimise towards the enquiries that actually turn into work. That is what we built for West of Brickell Homes.