POAS (Profit On Ad Spend) measures the gross profit generated per unit of ad spend — (revenue minus cost of goods minus ad spend) divided by ad spend — instead of the gross revenue measured by ROAS.
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Return on Ad Spend (ROAS) is the historical default metric for paid acquisition: revenue divided by ad spend. A 4× ROAS means €4 in revenue for every €1 spent. The flaw is that revenue is not profit. A 4× ROAS on a 10% margin product loses money; the same 4× on a 40% margin product is highly profitable. Optimising bids on ROAS alone tends to over-spend on low-margin, high-volume items.
POAS fixes this by subtracting cost of goods sold and the ad spend itself from the revenue before dividing. The result is the actual gross profit per euro spent. A POAS of 1.5 means €1.50 of profit for every €1 of ad spend after accounting for the cost of the product. Negative POAS means the campaign is losing money even when ROAS looks healthy.
Optimising to POAS requires accurate per-product cost of goods (COGS). Most feed tools ignore COGS entirely — FeedArc imports it automatically from Shopify, WooCommerce, PrestaShop, Magento, OpenCart, and Shopware, so POAS is calculated per product and per campaign without manual data entry. POAS can then be exposed to Performance Max via Google Ads conversion value rules or custom labels, allowing the bidding algorithm to chase profit instead of revenue.
Where the concept above breaks down or needs careful application — written honestly so you can make better decisions.
COGS (Cost of Goods Sold) is the direct cost of producing or acquiring a unit of a product — typically the wholesale price for resellers, or raw material plus labour for manufacturers — used to calculate gross margin and profit-based bidding metrics.
Custom labels 0 through 4 are five free-text fields in Google Shopping feeds used to segment products for bidding — typically populated from Google Analytics 4 performance data so high-revenue products can be bid on differently from low-revenue ones.
Feed rules are transformations applied to a product catalog before export — mapping internal field names to channel-specific schemas, filtering out ineligible products, enriching data, or applying conditional logic per channel.
How AI is reshaping product feed management — from AI-generated titles in 7 languages to vision-based image quality, taxonomy mapping, GTIN validation, and POAS signals.
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FeedArc handles profit on ad spend — and 31 other feed concerns — automatically. Free to start, no credit card needed.
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