What is POAS?
Also known as: Profit on Ad Spend
Profit on Ad Spend — like ROAS but with gross profit instead of revenue. Honest for mixed-margin businesses where revenue and profit diverge.
POAS = Gross Profit ÷ Ad SpendThe detailed definition
POAS replaces revenue in the numerator with gross profit, capturing the variation in margin that ROAS hides. For a mixed-cart ecommerce store selling 30%-margin and 80%-margin products, two campaigns with identical ROAS can have wildly different profit contributions. POAS makes the difference visible. The trade-off is implementation: ad platforms don't know your margins, so POAS requires joining SKU-level revenue with margin data — usually in your BI tool or in Floowzy's Reports surface with margin metadata attached at the product level. The practical recommendation: use ROAS for daily campaign decisions and POAS for monthly budget allocation, where the difference between revenue and money kept matters.
Related terms
Frequently asked about POAS
›When should I use POAS instead of ROAS?
Whenever margin varies significantly across the products or services in a campaign. For fashion brands with sale and full-price items, retailers with mixed-category baskets, or SaaS companies with tiered pricing, POAS prevents you from optimizing for revenue while quietly burning profit. Single-margin businesses (most B2B SaaS with one product) can stay on ROAS without significant loss of accuracy.
›How do I calculate POAS?
Pull revenue attributed to your campaign, multiply by gross margin to get gross profit (or join SKU-level revenue × SKU-level margin for the most accurate version), then divide by ad spend. Most ad platforms can't report POAS natively because they don't know your margin — implementation usually happens in your BI layer or in Floowzy's Reports surface with margin metadata.
›What's a good POAS?
POAS over 1.0 means each ad dollar generates more than a dollar of gross profit. Above 1.5, the campaign covers customer acquisition with margin to spare. Below 1.0 with healthy ROAS means you're scaling unprofitably — revenue grows but profit doesn't.
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