Skip to content

ROASfinity Get early access

POAS (profit on ad spend)

POAS is the profit that ads produced divided by what they cost. It uses contribution margin instead of revenue, so it tells you whether the ads made money.

Stock photos and example labels, not customers.

Definition

POAS is the profit that ads produced divided by what they cost. It uses contribution margin instead of revenue, so it tells you whether the ads made money.

FormulaPOAS = contribution margin from ad orders / ad spend

Example with made-up numbers: Ads bring 3,000 in revenue at a 40 percent contribution margin, so 1,200 of margin, on 1,000 of spend. POAS = 1,200 / 1,000 = 1.2.

How to use it

ROAS compares revenue with spend. POAS compares margin with spend, so a product with a thin margin and a good ROAS shows up as the loss it is.

It needs reliable product costs. Where costs are an estimate, say so next to the number.

Related terms

ROAS Contribution margin Break-even ROAS

Go deeper

Contribution margin for ecommerce ads

Revenue pays for nothing until the costs of the order are taken away. Contribution margin is the number that tells you how much room the ads have.

Built for shop owners, creators and agencies. Stock photos, not customers.

Run the next client review from one screen.

We open one agency at a time, with your own accounts connected read-only first.

How we plan to price it