POAS > ROAS

Why POAS > ROAS (and What You Should Actually Be Tracking)

If you’re still measuring success by ROAS alone, it’s time for a mindset shift.

Let’s break it down.

ROAS (Return on Ad Spend) = Revenue ÷ Ad Spend
POAS (Profit on Ad Spend) = Profit ÷ Ad Spend

While ROAS tells you how much money came in, POAS tells you how much you actually made.

Big difference.

🚨 Here’s why this matters:

Let’s say you spend $1,000 on ads and make $4,000 in revenue.
That’s a 4x ROAS — sounds great, right?

But what if your product costs are $2,000, and your overhead and shipping eat up another $700?
Suddenly, your actual profit is only $1,300.

That makes your POAS just 1.3x.

So… why do most brands still obsess over ROAS?

Because it’s simple, and most ad platforms are built to report it.

But in today’s world where margins are tighter, ads are more expensive, and every dollar counts it’s not enough.

Here’s what we recommend:

✔️ Shift your success metrics from ROAS to POAS
✔️ Understand your true product margins
✔️ Use tools like Lifetimely, Triple Whale or Polar Analytics to track profit
✔️ Align your ad strategy with profitable growth – not just revenue spikes

Bottom line?
ROAS is cute.
POAS is king.