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POAS

Profit on Ad Spend

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.

Formulagross profit ÷ ad spend × 100
Unitpercent
Where to find ityour own sheet, Google Ads with cart data
Break-even100% at any margin

Definition

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.

How to calculate POAS

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.

POASgross profit ÷ ad spend × 100Example: €12,000 gross profit ÷ €10,000 ad spend × 100 = 120%
From ROASROAS × margin % ÷ 100Example: 400% ROAS × 30% margin ÷ 100 = 120% POAS
Break-evenPOAS = 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.

POAS calculator: same ROAS, different profit

Two categories, the same ROAS, the same budget, different margins. Move the sliders and see why ROAS cannot tell them apart and POAS can.

Which category do your ads actually pay forLive calculation
POAS A160%gross profit per unit of spend
POAS B60%gross profit per unit of spend
Profit gap2,050 EURA vs B per month

What is a good POAS

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 vs ROAS vs ACoS vs ROI

POAS does not replace the other metrics everywhere. It answers a different question and has a different break-even point.

MetricFormulaWhat it answersBreak-even
POASgross profit ÷ ad spend × 100Gross profit per unit of ad spend100%
ROASrevenue ÷ ad spend × 100Revenue per unit of ad spend1 ÷ margin × 100
ACoSad spend ÷ revenue × 100Share of revenue eaten by adsequals margin
ROI(return − cost) ÷ cost × 100Return on the whole investment, other costs included0%

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.

Three POAS mistakes

Using revenue with VAT

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.

Ignoring free shipping, payment fees and returns

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.

Judging POAS without incrementality

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.

FAQ

What does a POAS of 150% mean?

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.

What is the difference between POAS and ROAS?

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.

What is a good POAS?

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.

Can Google Ads optimize for POAS?

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 don’t I need POAS?

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.

01 When 400% ROAS beats 500% ROASWhy a higher ROAS does not have to mean more profit, and how to move from ROAS to POAS. Read the article ↗ 02 Why one PMax for the whole store can hold growth backWhy one target ROAS doesn’t fit a range with different margins, and when to split the campaign. Read the article ↗

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