ROAS has been the default metric for years, but it only looks at revenue. This means campaigns can push products that sell well but bring little (or no) profit. POAS solves this by factoring in profit margins, cost of goods sold (COGS), shipping, and returns.
In today’s campaigns, where automation decides targeting and bidding, POAS provides better signals. Instead of rewarding high-ticket, low-margin items, you teach the algorithm to focus on high-margin, high-profit conversions — leading to healthier, long-term business growth.
POAS campaigns suit advertisers who already track costs and profit per product. They’re perfect for brands focused on sustainable, profit-based growth rather than just revenue.
At its core, POAS tells you how much profit you’re earning for every dollar spent on advertising:
POAS = Profit / Ad Spend
POAS % = (Profit / Ad Spend) * 100
This contrasts with ROAS, which measures revenue per dollar spent:
ROAS = Revenue / Ad Spend
Unlike ROAS, which only looks at revenue, POAS includes your product costs, shipping, and returns. This means it doesn’t just measure sales volume, it shows if your ads are actually profitable.
ROAS can make results look good without proving profitability. Imagine:
In the first case, ROAS looks stronger, but POAS shows the second product is three times more profitable. This is why POAS could be a better metric for your business: it helps the algorithm push the products that actually grow profit, not just revenue.
A POAS structure works much like ROAS. The goal is to separate products by profitability and allocate budgets where they deliver the best return.
Before you start, keep in mind:
Segmentation approaches:
Tip: Refresh your tiers monthly. Promote winners, cut or downsize weak performers, and adjust for seasonality or margin changes.
We asked PPC and Social Media specialists who work with POAS campaigns to share their top tips:
