POAS (profit on ad spend) is the profit your ad-driven orders leave, after product and per-order costs, for every unit of ad spend. A POAS of 1.0 is break-even: the profit exactly pays for the ads. This calculator gives you POAS, your profit after ads, the break-even ROAS where POAS hits 1.0, and the ROAS you need for any target POAS.
How to use this calculator
- Enter the revenue your ads drove in a period. Delivered revenue, after returns and refused COD orders, is the most honest figure.
- Enter your ad spend for the same period.
- Enter your contribution margin as a percentage of revenue: what's left after product cost, shipping and packaging, payment fees and a returns allowance.
- Optionally, enter a target POAS, such as 1.3 if you want 30% more profit than the ads cost.
- Read POAS, profit after ads, break-even ROAS and the ROAS that hits your target.
How do you calculate POAS?
- Gross profit from ad orders = revenue × contribution margin %
- POAS = gross profit ÷ ad spend
- Profit after ads = gross profit − ad spend
Because gross profit is revenue × margin, POAS and ROAS are tied together:
- POAS = ROAS × margin %
- Break-even ROAS = 1 ÷ margin %, the ROAS where POAS is exactly 1.0
- ROAS for a target POAS = target POAS ÷ margin %
The last formula turns a profit goal into a number you can watch in Ads Manager, which reports revenue-based ROAS rather than profit.
Here, gross profit means revenue minus every cost that comes with an order, the same definition as the POAS glossary entry. Fixed costs such as salaries, rent and software are not included.
Worked example
In rupees. Ads drove ₹4,50,000 of revenue on ₹1,20,000 of spend, a 3.75× ROAS. At a 45% margin, gross profit is ₹2,02,500, so POAS = 2,02,500 ÷ 1,20,000 = 1.69. Profit after ads is ₹82,500. Break-even ROAS is 1 ÷ 0.45 = 2.22×, and a target POAS of 1.2 needs a ROAS of 1.2 ÷ 0.45 = 2.67×.
In dollars. $12,000 of revenue on $3,000 of spend is a 4× ROAS. At a 40% margin, gross profit is $4,800 and POAS is 1.6: $1.60 of profit for every $1 of ads, or $1,800 after ads. Break-even ROAS is 2.5×, and a 1.3 target POAS needs 3.25×.
POAS vs ROAS
| ROAS | POAS | |
|---|---|---|
| Measures | Revenue per unit of ad spend | Profit per unit of ad spend |
| Break-even point | Different for every margin | Always 1.0 |
| Where it comes from | Reported by Meta | Needs your cost data |
| Best for | Comparing ads that sell the same product | Comparing products, campaigns or stores with different margins |
Example: two campaigns each spend ₹10,000 and bring in ₹30,000, a 3× ROAS. One sells a product with a 70% margin, so its POAS is 3 × 0.7 = 2.1. The other sells at a 30% margin, so its POAS is 0.9 and it loses 10 paise of profit on every rupee of ads. ROAS rates them equally. POAS tells you which one to scale.
What is a good POAS?
Anything above 1.0 means your ads more than pay for themselves at the order level. But the business also has fixed costs to cover. To find the POAS that covers them at your planned spend:
POAS needed = 1 + fixed costs ÷ ad spend
Example: with ₹1,00,000 of monthly fixed costs and ₹2,00,000 of monthly ad spend, you need a POAS of at least 1 + 0.5 = 1.5 before the business makes a profit, assuming the ads drive all your sales. Repeat and organic orders help cover fixed costs, so a business with strong repeat buying can run ads closer to 1.0. Check that with the LTV:CAC calculator.
Getting the margin right
POAS is only as good as the margin you feed it:
- Work it out per order. Price minus product cost, shipping and packaging, fees and other variable costs. The break-even ROAS calculator does this for you.
- Mixed catalogues. If you sell high- and low-margin products, use the average margin of the orders your ads actually drove, or calculate POAS campaign by campaign.
- COD and returns. Your pixel usually records a purchase when the order is placed, so refused COD parcels inflate reported revenue. Use delivered revenue, or include an RTO allowance in your margin. Facebook ads for COD brands in India covers this.
Can Meta optimise for POAS?
Not directly. Meta reports and bids on the purchase value you send it. Some advertisers send profit instead of revenue as the purchase value through the Conversions API, so that value-based bidding chases margin rather than revenue. The trade-off is that Ads Manager then shows profit where it used to show revenue, which can confuse reporting. Decide deliberately, and keep revenue reporting in your store.
How to raise your POAS
- Shift budget towards high-margin products and bundles.
- Raise average order value, because per-order costs like shipping don't grow as fast as the order.
- Cut RTO and returns, which lift margin without touching ads.
- Review discounts, which come straight out of margin.
- Lift ROAS itself with better creative and a better conversion rate.
For the revenue side, use the ROAS calculator. For the whole business across every channel, use the MER calculator.
Frequently asked questions
What is POAS?
POAS (profit on ad spend) is the gross profit your ad-driven orders leave, after product, shipping, fees and returns, divided by ad spend. A POAS of 1.0 means the profit exactly covers the ads. Above 1.0, the ads pay for themselves and more.
How do you calculate POAS?
Multiply ad-driven revenue by your contribution margin to get gross profit, then divide by ad spend. ₹4,50,000 of revenue at a 45% margin is ₹2,02,500 of profit, and on ₹1,20,000 of spend that's a POAS of 1.69. A shortcut is POAS = ROAS × margin %.
What is a good POAS?
Above 1.0 is profitable at the order level, but your business also has fixed costs. The POAS that covers them is 1 + fixed costs ÷ ad spend, so ₹1,00,000 of fixed costs on ₹2,00,000 of spend needs a POAS of 1.5. Strong repeat purchases can justify running closer to 1.0.
What is the difference between POAS and ROAS?
ROAS is revenue divided by ad spend, and POAS is profit divided by ad spend. Two campaigns with the same 3× ROAS can have a POAS of 2.1 and 0.9 if their margins are 70% and 30%. POAS has the same break-even point of 1.0 for every product, which makes it easier to compare across a catalogue.
Can I see POAS in Meta Ads Manager?
Not as a standard column, because Meta reports purchase value, which is usually revenue. You can calculate it in a spreadsheet from Ads Manager spend and your own cost data, or convert a POAS target into a ROAS target with target POAS ÷ margin %. Some advertisers send profit as the purchase value through the Conversions API instead.
