POAS - Quick Reference
Profit on Ad Spend (POAS)
POAS (Profit on Ad Spend) measures the contribution margin generated per pound of advertising spend, rather than the gross revenue ROAS reports. It is the metric ecommerce P&Ls actually care about.
The formula
POAS = (Revenue - COGS - Shipping - Returns - Payment fees - Discounts) / Ad spend
A 2x POAS means every pound of ad spend produced two pounds of contribution margin. For most ecommerce categories, 1.5x to 2.5x is the sustainable scale band.
This is the quick reference. The full pillar guide covers ROAS vs MER vs POAS, category benchmarks, SKU-level targeting, bid automation, and when not to use POAS.
Read the full POAS guideNote: POAS is a registered trademark of ProfitMetrics. JudeLuxe is an independent UK Google Ads agency that applies the metric in client accounts.
POAS vs ROAS — side by side
ROAS measures revenue per pound of ad spend. POAS measures contribution profit. The two diverge fast once product margins vary — and a 4× ROAS on a 25% margin product clears break-even with zero profit attached. This is the difference your CFO is reading from the P&L while the ads dashboard celebrates.
| Dimension | ROAS | POAS |
|---|---|---|
| What it measures | Revenue generated | Contribution profit generated |
| Accounts for product margin | No | Yes |
| Shows true commercial return | No | Yes |
| Speaks the CFO's language | No | Yes |
| Platform-native metric | Yes | Requires setup |
| SKU-level decision-making | Misleading | Accurate |
| Prevents hidden losses at scale | No | Yes |
Worked example — same ROAS, different profit
Two campaigns, same £1,000 spend, same 5× ROAS. Different margin profile. Different P&L outcome.
Campaign A — low-margin SKU
- Spend: £1,000
- Revenue: £5,000 (ROAS 5×)
- COGS & variable costs (78%): £3,900
- Gross profit: £1,100
POAS: 1.1× — barely breaks even
Campaign B — high-margin SKU
- Spend: £1,000
- Revenue: £5,000 (ROAS 5×)
- COGS & variable costs (50%): £2,500
- Gross profit: £2,500
POAS: 2.5× — real contribution
Identical ROAS, >2× difference in contribution profit. Scaling Campaign A at the same target multiplies the break-even risk; scaling Campaign B builds margin. ROAS can't see the difference — POAS is the metric that can. For category benchmarks, SKU-level targeting and bid automation, read the full POAS vs MER vs ROAS guide.
POAS calculator
Plug in revenue, COGS and ad spend. Compare ROAS to POAS in real numbers. For the full version with break-even ROAS, profit-per-pound and a benchmarked report, use the dedicated POAS calculator.
POAS Calculator
Enter your numbers. See ROAS, POAS and net profit after ads.
ROAS
6.67x
Gross profit
£6,000
POAS
4.00:1
Net after ads
£4,500
POAS = Gross Profit ÷ Ad Spend. A POAS of 1.5:1 means £1.50 of gross profit per £1 of ad spend, before warehousing, staff and platform fees. POAS is a registered trademark of ProfitMetrics.