What is POAS?

POAS stands for Profit on Ad Spend. Where ROAS (Return on Ad Spend) divides ad-attributed revenue by spend, POAS divides ad-attributed gross profit by the same spend.

If you spent $1,000 on Google Ads last week and those clicks generated $4,000 in revenue with $2,200 in gross profit after COGS and variable costs, your ROAS is 400% but your POAS is 220%. The second number is what you can actually reinvest.

Ecommerce catalogs mix high-margin heroes, loss-leader bundles, and SKUs with expensive shipping. Revenue-based ROAS treats a $120 order with 60% margin the same as a $120 order with 8% margin after fees.

POAS exposes which campaigns fund growth and which ones merely move revenue. Finance teams align with marketing when everyone watches contribution margin, not just top-line ROAS in Google Ads.

• Stop scaling SKUs that look like winners on ROAS but lose money after COGS.
• Set tROAS / value targets that respect margin bands, not average catalog price.
• Use A/C/X product labels to automate budget toward profitable SKUs.
• Report to stakeholders in a language closer to P&L than ad platform dashboards.

Accurate POAS needs order-level profit components synced from your ecommerce platform: product COGS, payment fees, shipping cost or subsidy, tax handling, and refunds.

Profit Bid connects WooCommerce, Shopify, BigCommerce, PrestaShop, Shopware, and OpenCart, then maps those costs into per-SKU and per-order gross profit before uploading conversion values to ad platforms.

Breakeven POAS is 100% on ad-attributed gross profit — below that, ads destroy margin before rent and payroll. Many healthy DTC brands target 120–200% POAS depending on repeat rate, LTV, and fixed overhead.

Use POAS bands by category: accessories often need higher POAS than replenishment consumables. Promo weeks may accept lower POAS if LTV justifies it — but measure that explicitly, not by gut feel.

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