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Profit calculator

POAS Calculator: Profit on Ad Spend

POAS, profit on ad spend, is the gross profit from ad-driven sales divided by ad spend.

Nic Crane · FounderFreeFormula on the page
POAS calculator

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Your POAS—
The same sales as ROAS—
Gross profit after ad spend—

Enter your figures to see the result.

A POAS of 1 means the ads paid for themselves exactly; above 1 they made money before overheads, and below 1 they lost it. Unlike ROAS, it already accounts for what the products cost you.

The formula

  • POAS=(revenue − product costs) ÷ ad spend
  • Break-even POAS=1

POAS vs ROAS

Two products can show the same ROAS and very different profit. £1,000 of sales from £250 of ads is a ROAS of 4 either way. If the products cost £400, gross profit is £600 and POAS is 2.4. If they cost £800, gross profit is £200 and POAS is 0.8: the same ROAS, and the ads lost money. POAS shows the difference; ROAS hides it.

Bidding on profit instead of revenue

Google Ads and Meta can bid toward a conversion value you send them. If the value you send with each sale is its gross profit rather than its revenue, a target ROAS strategy in effect becomes a target POAS strategy, and spend moves toward the products that make money. It needs product costs available at the moment of sale, which is usually the hard part.

Common questions

The questions that come up.

What is a good POAS?

Above 1 means the ads made money before overheads. How far above 1 you need depends on what your overheads take from gross profit, which only your own accounts can tell you.

How do I calculate POAS?

Take the revenue the ads produced, subtract what those products cost you, and divide by the ad spend. £1,000 of sales, £400 of product costs and £250 of ads gives a POAS of 2.4.

Can Google Ads bid on profit?

Yes, indirectly. Smart Bidding optimises toward the conversion value it is given. Send gross profit as the value and it optimises toward profit.

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