POAS
DefinitionPOAS (profit on ad spend) is the gross profit from a campaign’s sales divided by what the campaign cost. Because margin is already factored in, it tells you straight away whether a campaign makes money: anything above 1 is profit.
How it works
Profit here means campaign revenue minus the cost of the goods sold, in other words your margin in euros before ad costs. Break-even is always 1.0, whatever the margin, which makes it easy to compare campaigns selling products with very different margins. For a platform to optimise for POAS, each conversion has to carry the profit from the order rather than the revenue, for example through a product feed that includes margin or through server-side conversion tracking.
- Campaign revenue
- €10,000
- ×Margin
- 30%
- =Gross profit
- €3,000
- ÷Ad spend
- €2,500
- =POAS
- 1.2
This campaign’s ROAS is 4.0 and its POAS is 1.2. Figures are illustrative.
What it means for you
With ROAS, you have to work out a separate break-even point for every margin. POAS has it built in: a result of 1.2 means every euro spent on ads came back with 20 cents of profit on top. Budget decisions then rest on what the business actually keeps.
From our accounts
In shops with a wide product range, switching the campaign goal from revenue to profit per order is one of the decisions we record most often in the Decision Log. It starts with analytics: the platform needs your margin data before it can optimise for it.
We set up margin data as part of our web analytics work, so your campaigns can optimise for profit.
Web analytics