What is POAS?

Understanding POAS

POAS brings margin discipline to performance marketing by asking what profit your ads produce for every dollar spent. It forces teams to account for costs like COGS, shipping, and payment fees that ROAS ignores. Brands use POAS to decide which campaigns to scale, which SKUs to push, and where creative or feed fixes will actually move the bottom line. When catalogs span multiple margin tiers, POAS prevents high‑revenue, low‑margin products from soaking up budget. The outcome is spend that tracks contribution profit instead of vanity revenue.

The key idea is simple but powerful. ROAS can look great while POAS is underwater if COGS or discounts eat margins. Reporting POAS by SKU or product set reveals winners and losers hiding inside blended averages. Creative that clarifies price and value can raise AOV and improve unit margins, lifting POAS. Feed enrichment that improves matching reduces refund‑prone clicks. Over time, POAS‑led decisions compound sustainably.

Why POAS matters

POAS matters because you can’t scale losses, and this metric keeps media decisions tied to unit economics. It aligns marketing with finance so teams optimize for profit, not just revenue. It also clarifies which levers—feed quality, creative templates, targeting—actually move contribution margin.

• Profit focus: Keeps scaling tied to contribution margin, not vanity revenue.
• SKU clarity: Highlights which products and categories are truly profitable to advertise.
• Creative and feed ROI: Shows whether design changes or feed enrichment translate to profit, not just clicks.
• Budget allocation: Prioritizes campaigns, platforms, and audiences that return net profit.

How POAS works

POAS works by measuring profit generated per ad dollar after variable costs, turning blended revenue into actionable unit economics. Start by reporting POAS by SKU or product set, then prune losers and feed more budget to winners. Clean feed data in catalog ads makes SKU‑level outcomes visible so you can identify truly profitable products. Creative templates with price, reviews, and promos raise AOV and improve click quality, which lifts POAS. Prospecting and retargeting often require different POAS targets, so evaluate them separately. Trend POAS over time to confirm that feed and creative improvements translate into sustained profit.

Key Takeaways

• POAS focuses growth on profit, not revenue.
• Enriched feeds and intent-led creative are the fastest levers.
• Manage POAS at the SKU and product set level; prune losers, scale winners.