This guide breaks down two profit metrics - ROAS and POAS - so you know which one to trust at each stage of scaling.
ROAS = Revenue / Ad Spend
→ Measures how much revenue you generate for every $1 spent on ads.
Example: Spend $1,000 → Make $5,000 → ROAS = 5x
POAS = Profit / Ad Spend
→ Measures how much profit (after product cost, fees, shipping, etc.) you make per $1 spent.
Example: Spend $1,000 → Profit $1,500 → POAS = 1.5x
| Metric | Focus | Ignores | Good For | Bad For |
|---|---|---|---|---|
| ROAS | Top-line revenue | Margins, COGS, fees | Initial scaling, testing new offers, comparing product demand | Profit tracking, mature brand decisions |
| POAS | Bottom-line profit | - | Profit optimization, stable scaling, finance clarity | Early testing (hard to calculate accurately yet) |