Why POAS is the Metric You Should Be Focusing on Not Just ROAS

If you’re running eCommerce campaigns or working with clients in this space, you’ve probably heard the term ROAS thrown around like it’s the ultimate sign of success. And for a long time, it was. But I’m here to tell you something that might surprise you: ROAS isn’t everything.

Let’s talk about POAS—Profitability on Ad Spend—and why it’s quickly becoming the smarter, more sustainable way to measure the impact of your paid media campaigns.

ROAS: The Old Favorite with Some Major Blind Spots

Don’t get me wrong; ROAS has its place. It’s easy to understand and gives you a quick look at how much revenue your campaigns are generating compared to what you’re spending.

Here’s the problem: ROAS is kind of like looking at your paycheck without thinking about taxes, rent, and groceries. Sure, it tells you what you’ve made, but it doesn’t tell you what you actually keep.

I’ve seen campaigns that boast sky-high ROAS numbers but barely move the needle on a business’s bottom line. Why? Because ROAS doesn’t account for things like:

• Product margins (Are you selling low-margin products that look great on paper but don’t make money?)
• Operational costs (What’s the cost of fulfilling that sale?)
• Long-term value (Is this customer likely to buy again?)

And this is where POAS comes in.

What is POAS and Why Should You Care?

POAS stands for Profitability on Ad Spend. It’s exactly what it sounds like—measuring how much actual profit your campaigns generate after accounting for costs like:

• Cost of Goods Sold (COGS)
• Advertising spend
• Shipping and fulfillment

Essentially, POAS puts the profit front and center, which is what businesses actually care about at the end of the day.

Why POAS is More Important Than Ever

Over the last few years, platforms like Google and Meta have become increasingly “smart.” Their algorithms are designed to optimise for revenue and conversion volume, but here’s the kicker: they don’t care about profitability.

For example, your Performance Max campaign might see a spike in revenue because it’s driving high-ticket sales, but if those products have razor-thin margins, your business might be losing money on each sale.

In today’s landscape, where ad costs are rising and competition is fierce, chasing revenue alone isn’t enough. We need to be smarter—and more profitable—with every dollar spent.

Bridging the Gap: Paid Media Meets Business Goals

Here’s where things get exciting. POAS isn’t just about plugging numbers into a formula—it’s about creating a stronger connection between your advertising campaigns and your business goals.

Start with Data That Matters

You can’t optimise for profitability if you don’t know your numbers. I work closely with clients to understand their profit margins, customer acquisition costs, and even lifetime value (LTV). This helps us set realistic and meaningful goals for their campaigns.

Customise Your Strategy

Every business is different. That’s why I go beyond the default platform metrics and integrate real-world data into campaign management. For example, importing profit data into Google Ads allows us to prioritise campaigns and products that drive actual profit, not just revenue.

Focus on Long-Term Growth

A POAS-driven strategy is about sustainability. Instead of chasing short-term wins, I help my clients build campaigns that create loyal, profitable customers over time.

How to Shift Your Focus to POAS

Making the switch to POAS doesn’t have to be complicated. Here’s how you can start:

1. Understand Margins: Work with your team or clients to get clarity on product margins and costs.
2. Track Profitability: Use tools to track profit alongside revenue in your campaigns. Google Ads allows you to upload profit data as custom metrics.
3. Test and Learn: Run experiments to see how a profitability-focused approach compares to traditional ROAS strategies. You might be surprised by the results.
4. Collaborate More: Paid media can’t exist in a vacuum. Align your ad strategy with your client’s overall business strategy to unlock greater potential.

The bottom line? Focusing on profitability instead of just revenue can completely transform the way you run your campaigns—and the results your clients see.

It’s not about throwing ROAS out the window, but rather looking at the bigger picture. At the end of the day, the businesses we work with don’t just want impressive-looking dashboards; they want to see real, measurable growth.

So next time you’re reviewing campaign performance, ask yourself this: Are we making money? With POAS as your guiding star, the answer will always be clear.

What’s your take on this shift? Have you started focusing on profitability in your campaigns? I’d love to hear your thoughts! I’m always up for a good conversation about how we can work smarter, not harder.