Why it matters
ROAS treats every rupee of revenue as equal, and it isn't. A ₹2,000 order of a high-margin serum and a ₹2,000 order of a low-margin appliance look identical in the ROAS column, yet one might leave ₹1,400 of profit and the other ₹400. POAS measures what you keep. Because it's built on profit, the break-even point is 1.0 for every product — no need for a separate break-even ROAS per item.
How to calculate it
- Take the orders your ads drove in the period.
- Subtract product cost and per-order costs — shipping, packaging, payment fees and a returns allowance — from their revenue. In this glossary, that's what gross profit means.
- Divide by ad spend.
The break-even ROAS calculator gives you profit per order to plug in. Meta reports revenue, not profit, so POAS usually lives in a spreadsheet that joins Ads Manager spend with order-level costs from your store. Some advertisers send profit instead of revenue as the purchase value through the Conversions API, so that value-based bidding chases margin. Ads Manager then reports profit where it used to report revenue, so decide deliberately.
Worked example
Example: two products with the same spend and the same ROAS.
| Serum | Hair dryer | |
|---|---|---|
| Ad spend | ₹10,000 | ₹10,000 |
| Revenue | ₹30,000 | ₹30,000 |
| ROAS | 3.0 | 3.0 |
| Gross profit | ₹21,000 | ₹9,000 |
| POAS | 2.1 | 0.9 |
The ROAS column rates them equally. POAS shows the serum returns ₹2.10 of profit per ₹1 of ads, while the hair dryer loses 10 paise on every rupee.
What's a good POAS?
Anything above 1.0 means the ads earn back more than they cost at the order level. How far above you need depends on your fixed costs (salaries, rent, software) and your profit goal. Work out the POAS that covers those at your planned spend, and treat that as your target.
When POAS beats ROAS
- Your catalogue mixes high- and low-margin products.
- Discounts and bundles vary a lot, so revenue overstates what's left.
- You run Advantage+ catalog ads, where Meta picks which products to show and may favour low-margin best-sellers.
- You're deciding where the next ₹1 lakh of budget goes: POAS ranks campaigns by profit, not sales.
ROAS stays handy for quick day-to-day reads inside Ads Manager. Use POAS for weekly decisions about budget and product focus.
Common mistakes
- Using only product cost and ignoring shipping, fees and returns.
- Calculating profit from list prices instead of what customers actually paid after discounts.
- Comparing your POAS with someone else's ROAS target.
Frequently asked questions
What is the difference between POAS and ROAS?
ROAS divides revenue by ad spend, while POAS divides gross profit by ad spend. Two products with the same ROAS can have very different POAS if their margins differ. ROAS shows sales per unit of spend. POAS shows what you actually keep.
What is a good POAS?
A POAS above 1.0 means the gross profit from ad-driven orders is higher than the ad spend, so the ads pay for themselves at the order level. How far above 1.0 you need depends on your fixed costs and profit goals. Work it out from your own numbers rather than borrowing a benchmark.
Can Meta optimise for POAS?
Not directly, because Meta optimises for the purchase value you send it, which is usually revenue. Some advertisers send profit as the purchase value through the Conversions API so value-based bidding chases margin instead. That works, but Ads Manager then stops showing true revenue, so many brands calculate POAS in a spreadsheet instead.
