Glossary - Acquisition and attribution
POAS
POAS (profit on ad spend) is the contribution margin earned on ad-attributed orders divided by the ad spend that produced them, so break-even is always 1.0. Ecommerce operators use POAS instead of revenue ROAS when margins vary across products, because it shows whether a campaign creates profit rather than just revenue.
| Contribution margin | Revenue from the attributed orders minus landed COGS, fulfilment, shipping and payment fees - the pre-marketing margin. Conventions differ: some tools stop at gross profit (revenue minus COGS); we use the fuller line so fulfilment and fees are not silently ignored. |
| Ad spend | The media cost of the campaign over the same period. |
Worked example
At 1.2, every ad dollar returns $1.20 of margin, so the campaign clears its variable costs with $1,000 of contribution left. The same orders on a thinner margin could show the identical 3.0x ROAS and a POAS below 1.0.
What is a good POAS?
Above 1.0 the campaign covers its variable costs - that floor is built into the metric, which is exactly why operators use it. How far above 1.0 you need depends on the fixed costs your margin must also carry and on how aggressively you are buying growth, not on an industry benchmark.
Because margins differ per product, what counts as good also differs per campaign: the honest move is to compute the floor from your own margin structure, which the free target MER calculator does. And remember the numerator still inherits whatever error the attribution model carries.
POAS vs related metrics
| Metric | What it measures | How it differs from POAS |
|---|---|---|
| ROAS | Attributed revenue ÷ ad spend. | Counts revenue, not margin - two equal ROAS figures can hide opposite profit verdicts. |
| MER | Total revenue ÷ total marketing spend. | Account-level and attribution-free; POAS is campaign-level and margin-aware. |
| Contribution margin | The margin pool itself, in dollars or as a share of revenue. | The numerator: POAS is that margin expressed per ad dollar. |
Common mistakes
- Stopping the numerator at COGS. Ignoring fulfilment, shipping and payment fees inflates POAS - the same trap gross margin sets for break-even ROAS.
- Using a store-average margin instead of the actual margins of the products the campaign sells.
- Assuming POAS fixes attribution. It fixes the margin blindness of ROAS; the attributed orders in the numerator carry the same attribution error.
- Ignoring returns. A returned order's margin is negative once outbound and return shipping are both paid.
- Maximising the ratio instead of the dollars. A 3.0 POAS on tiny spend can produce less total contribution than a 1.5 at scale.
FAQ
Anything above 1.0 covers its variable costs by definition; how far above you need depends on your fixed-cost load and growth posture, not on an industry benchmark.
POAS whenever margins differ across products or campaigns, which for most stores is always. Revenue ROAS only holds up when every order carries near-identical margin.
They are the same margin logic in different clothes: a campaign running at exactly its break-even ROAS has a POAS of exactly 1.0.
Related
- ROAS
- Break-even ROAS
- MER (marketing efficiency ratio)
- Contribution margin
- Target MER calculator
- All 14 free tools →
In Blufire, S6 Marketing & Channels tracks CM1-MER per channel - POAS's account-level cousin, computed on contribution margin for every channel at once.
Updated July 2026