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Are your ads making profit, or just revenue?
ROAS is revenue per pound spent. POAS, profit on ad spend, is what's left after the cost of your products, fees and delivery. A 5x ROAS can still lose money.
What is POAS?
POAS (profit on ad spend) is gross profit from advertising divided by ad spend. Gross profit is revenue multiplied by product margin, minus fees and delivery costs. A POAS above 1.0 means each pound of ad spend returns more than a pound of profit; below 1.0, the ads are losing money even if ROAS looks healthy.
Example figures shown. Replace them with one month of your own data.
POAS above 1.0 means each pound of ad spend returns more than a pound of profit. Below 1.0, ads are eating your margin.
Get a profit-first auditHow POAS is calculated
Your product margin is the share of each sale left after paying for the stock. Gross profit is revenue × margin, minus fees and delivery. POAS is that gross profit divided by ad spend. Break-even ROAS is revenue divided by gross profit: the ROAS where profit after ads is exactly zero.
We bid on profit for clients by feeding margin data into Google Ads, so Smart Bidding pushes the products that make money, not just the ones that sell.