POAS

What is POAS?

POAS (Profit on Ad Spend) is an advertising metric that measures the profit your ads generate divided by the ad spend. Where ROAS uses revenue in the numerator, POAS uses profit — typically gross profit (revenue minus cost of goods sold), and most accurately contribution margin, which also subtracts shipping, fees, and other variable costs. A POAS of 1.0 means profit exactly covers ad spend, so you generally need to be above 1 to make money.

Why does POAS matter?

ROAS can look great and still lose money, because revenue ignores margin. A high-revenue but low-margin sale can produce a healthy ROAS while contributing nothing to the bottom line. POAS exposes that “empty” revenue by measuring what actually reaches profit. For stores with widely varying margins across products, POAS therefore gives a far more accurate picture of which campaigns and products are genuinely profitable.

Common use cases

• Stores with large margin differences from product to product or category to category.
• Evaluating discount and sale campaigns, where ROAS overstates the value.
• Allocating budget across channels based on profit rather than revenue.
• Deciding bidding strategy when high-margin products should be prioritized.

Shopify perspective

Shopify stores Cost per item, which powers its internal profit reports, but it does not calculate POAS across ad channels in default analytics. To get live POAS, you need to unify ad spend and cost of goods in an attribution tool such as Triple Whale, Polar Analytics, or Northbeam. Make sure cost per item is filled in correctly on every variant, or the profit figures will be misleading.