POAS (profit on ad spend) measures advertising return on gross profit instead of revenue. You calculate it as the gross profit from orders driven by ads, divided by ad spend, times 100. A POAS of 100% means the ads have just paid for themselves. Anything above 100% is profit left after advertising.
POAS (profit on ad spend) measures advertising return on gross profit instead of revenue. You calculate it as the gross profit from orders driven by ads, divided by ad spend, times 100. A POAS of 100% means the ads have just paid for themselves. Anything above 100% is profit left after advertising.
POAS exists because ROAS has a blind spot. Revenue does not care whether you sold a product with an 8% margin or a 60% one, and the ad platform only sees the order value. POAS swaps revenue for what you actually keep after paying for the goods, your gross margin.
The numerator is gross profit: revenue excluding VAT or sales tax, minus the cost of the goods sold. The denominator is ad spend for the same period and the same campaigns. Some sources subtract ad spend in the numerator as well, which moves break-even from 100% to 0. We use the version without that subtraction, because it sits right next to ROAS on the same scale.
| POAS | gross profit ÷ ad spend × 100 | Example: €12,000 gross profit ÷ €10,000 ad spend × 100 = 120% |
| From ROAS | ROAS × margin % ÷ 100 | Example: 400% ROAS × 30% margin ÷ 100 = 120% POAS |
| Break-even | POAS = 100% | Ads paid for themselves out of margin; profit after ads is zero |
The second row is a shortcut for accounts that know their average margin but do not have it on every order. It is only accurate when margins across products are similar. And where they differ, you need POAS most.
Two categories, the same ROAS, the same budget, different margins. Move the sliders and see why ROAS cannot tell them apart and POAS can.
Break-even is always 100%, whatever your margin. That is the main advantage over ROAS, where the floor has to be worked out for each margin as break-even ROAS. Below 100%, ads eat into profit; above 100%, they add to it. How far above you need to be depends on what the margin still has to cover: warehouse, payroll, rent, ad management.
Our rule for stores with a mixed catalog: categories whose margins differ by 10 or more percentage points get their own campaign with their own target. That is how we run Elektro Sláma, where each category campaign has its own target ROAS between 4.2 and 4.9 (Google Ads, 2026).
In Google Ads you can get to POAS in two ways. Either you send gross profit instead of revenue as the conversion value, which effectively turns target ROAS into target POAS. Or you add the cost of goods to Merchant Center (the cost_of_goods_sold attribute) and set up conversions with cart data, which lets Google Ads report gross profit.
POAS does not replace the other metrics everywhere. It answers a different question and has a different break-even point.
| Metric | Formula | What it answers | Break-even |
|---|---|---|---|
| POAS | gross profit ÷ ad spend × 100 | Gross profit per unit of ad spend | 100% |
| ROAS | revenue ÷ ad spend × 100 | Revenue per unit of ad spend | 1 ÷ margin × 100 |
| ACoS | ad spend ÷ revenue × 100 | Share of revenue eaten by ads | equals margin |
| ROI | (return − cost) ÷ cost × 100 | Return on the whole investment, other costs included | 0% |
If you prefer ACoS, the same logic applies: maximum ACoS equals your margin. POAS just expresses it as one number you can compare across categories.
Metrics that show up in the same sentence as this one.
Margin is calculated from prices excluding VAT on both sides. Example: a product sold for €1,000 excluding VAT with a cost of €700 has a gross profit of €300. With 21% VAT left in the revenue, the profit shows as €510, 70% higher, and POAS inflates with it.
Gross margin from the product feed knows nothing about costs that appear only at the order level. Free shipping, payment processing fees and returned goods take several percentage points off. When you decide on budget, calculate POAS from the real margin, not the catalog one.
POAS tells you how much profit ads claimed, not how much they added. Brand campaigns show a high POAS because the customer would have come anyway. Only incrementality shows how much profit the ads really created.
Every euro spent on ads brought back €1.50 in gross profit. After paying for the ads, 50 cents per euro of spend is left to cover overheads and profit.
ROAS divides revenue by ad spend; POAS divides gross profit by ad spend. At a 30% margin, POAS equals ROAS × 0.3, so a 400% ROAS is a 120% POAS. The difference matters when products carry different margins.
Anything above 100%. The break-even point is the same for every store regardless of margin. How far above it to aim depends on your fixed costs and on whether you want growth or profit now.
Indirectly. If you send gross profit instead of revenue as the conversion value, target ROAS effectively becomes target POAS. The other route is cost of goods in Merchant Center plus conversions with cart data, which lets Google Ads report gross profit.
When you sell one product or a range with similar margins. POAS and ROAS then show the same thing on a different scale, and knowing your break-even ROAS is enough.
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