POAS stands for profit on ad spend and measures gross profit generated for each dollar of ad spend. POAS tells you whether your advertising is generating profit, not just revenue.
POAS tells you whether your advertising is generating profit, not just revenue.
| Field | Detail |
|---|---|
| Definition | POAS stands for profit on ad spend and measures gross profit generated for each dollar of ad spend. |
| Formula | Gross Profit / Ad Spend |
| Why it matters | POAS is one of the clearest ways to stop revenue-rich, margin-poor campaigns from looking healthier than they really are. |
| Good benchmark context | POAS matters most in ecommerce, subscriptions, marketplaces, and paid-media programs where product margin and fulfillment costs vary meaningfully across channels. |
Glossary entries should explain where interpretation goes wrong, not just repeat a formula.
| Common mistake |
|---|
| Using revenue instead of gross profit in the numerator. |
| Applying one blended margin assumption to products with very different economics. |
| Treating POAS as a replacement for customer-value and retention context. |
POAS is one of the clearest ways to stop revenue-rich, margin-poor campaigns from looking healthier than they really are.
POAS tells you whether your advertising is generating profit, not just revenue.
POAS matters most in ecommerce, subscriptions, marketplaces, and paid-media programs where product margin and fulfillment costs vary meaningfully across channels.
POAS tells you whether your advertising is generating profit, not just revenue.
POAS matters most in ecommerce, subscriptions, marketplaces, and paid-media programs where product margin and fulfillment costs vary meaningfully across channels.