Free tool
Use this POAS calculator to understand whether paid media is generating profitable growth, not just revenue. Calculate profit on ad spend, profit after media costs and compare ROAS with POAS.
POAS
1.45×
ROAS
4×
Profit after ad spend
£4,500
Margin after media
11.3%
ROAS vs POAS — revenue return vs profit return
Break-even POAS is 1.0× — profit exactly covers ad spend.
Low margin — profitable but thin
POAS, or profit on ad spend, measures profit generated from advertising rather than revenue attributed to advertising. This matters because ROAS can make campaigns look efficient even when margins, fulfilment costs, discounts, returns and platform fees reduce actual profitability. For ecommerce planning, POAS gives a clearer view of whether paid media is creating profitable growth.
Start with gross profit — revenue multiplied by your gross margin. Then subtract the costs that ROAS ignores: shipping and fulfilment, platform and payment fees, the revenue lost to returns, and the value given away in discounts. That leaves the real profit a sale generates. POAS is that profit divided by ad spend. Profit after ad spend simply subtracts the media cost itself, and the margin after media expresses what is left as a share of revenue.
ROAS answers “how much revenue did a pound of advertising return?” POAS answers “how much profit did it return?” — a very different question. The gap between the two is everything that sits between revenue and the bottom line. A store running 4× ROAS on heavily discounted, low-margin products with a high return rate can quietly be at or below break-even on POAS. Reading them side by side is the only way to see that.
ROAS is seductive because it is easy to measure and usually looks healthy. But optimising spend to revenue rewards whatever drives sales — including discounting and pushing low-margin bestsellers — regardless of what reaches profit. Scaling a campaign with strong ROAS and weak POAS simply buys more unprofitable revenue faster. POAS closes that blind spot.
Break-even POAS is 1.0× — profit exactly equals ad spend. The equivalent on the revenue side is your break-even ROAS, the minimum revenue return that covers product cost and fees. Together they set the floor for bidding: break-even ROAS tells you the lowest ROAS that is not loss-making, and POAS confirms whether the profit above that floor is actually worth scaling.
This calculator measures profitability today. ElenIQ’s Dex forecasts how budget changes are likely to move revenue, ROAS and profit before spend is committed, so you can test a scale-up against profit rather than revenue alone. Pair it with the marginal ROAS calculator to check whether the next pound of spend still clears your profit floor.
POAS, or profit on ad spend, measures the profit generated from advertising rather than the revenue attributed to it. It is calculated as profit ÷ ad spend, where profit is revenue after product cost, fees, shipping, returns and discounts. POAS shows whether paid media is driving profitable growth, not just top-line sales.
First find profit: revenue × gross margin, minus shipping, platform fees, returns and discounts. Then POAS = profit ÷ ad spend. A POAS of 1.0 is break-even after media; above 1.0 the campaign adds profit, below 1.0 it loses money even if ROAS looks healthy.
ROAS = revenue ÷ ad spend, so it measures sales, not profit. POAS = profit ÷ ad spend, so it measures what actually reaches the bottom line. A campaign can post a 4× ROAS and still be marginal on POAS once margin, fees, returns and discounts are taken out.
Ecommerce margins are eroded by COGS, shipping, payment and platform fees, returns and discounting. POAS folds all of that in, so it stops paid media being optimised to revenue that does not convert into profit. It is the metric that keeps scaling decisions honest.
Yes — this is the most common trap in ecommerce. A high ROAS on low-margin products, heavy discounting or high return rates can still produce thin or negative profit. Tracking POAS alongside ROAS surfaces that gap before budget scales the problem.
Shift spend toward higher-margin products and the channels with the strongest marginal return, reduce discount dependence, cut return rates, and set bidding targets from break-even ROAS rather than a blanket figure. ElenIQ’s Dex helps forecast how those moves change profit before budget is committed.
Use Dex to forecast ecommerce revenue, ROAS and profit scenarios before increasing spend — so growth stays profitable, not just bigger.
Explore ad spend forecasting