Cloud Ten / POAS calculator
POAS calculator: what your reported ROAS actually leaves you.
Work out your true profit on ad spend. Enter revenue, margin, fees and returns to see what your reported ROAS actually leaves you.
Contribution profit after ad spend: £0 per month. This is the number your P&L sees.
What is POAS?
POAS is profit on ad spend — the gross profit your advertising produced, divided by what you spent to produce it. ROAS divides revenue by spend. POAS divides profit by spend. On a 30% margin product those two numbers are wildly different, and only one of them can pay salaries.
Why ROAS flatters you
A 6x ROAS on a 25% margin product is a 1.5x POAS before you have paid for shipping, payment processing or returns. Scaling on ROAS pushes budget toward whichever products convert cheapest, which are usually the least profitable ones.
What good looks like
A POAS above 1.0 means paid media is contributing gross profit. Whether that is enough depends on your overheads — most brands need 1.5x to 2.5x for paid to genuinely fund growth rather than just cover itself.
How to calculate POAS: a worked example
Meta reports £100,000 of revenue on £20,000 of spend, a 5.0x ROAS. Returns run at 8%, so £92,000 stays sold. At a 60% gross margin that is £55,200 of gross profit. Shipping, fulfilment and payment fees take 10% of net revenue, another £9,200. Contribution is £46,000. Divide by the £20,000 spent and POAS is 2.3x. The dashboard said 5.0x. The bank saw less than half of it.
POAS bidding
Once you know profit per product you can hand it back to the platforms. Send gross profit as the conversion value instead of revenue, or set a target ROAS per product from its own margin, and the algorithm starts buying the orders that leave money behind rather than the ones that convert cheapest.
POAS, MER and break-even
POAS tells you what a channel made in profit. MER tells you what the whole operation made across every channel, with no double-counting. Break-even ROAS tells you the floor beneath both. You need all three, and none of them are in your ad account.
Frequently asked
What is a good POAS?
Anything above 1.0 means paid media produced more gross profit than it cost. Most brands need 1.5x to 2.5x for advertising to genuinely fund growth once overheads are covered.
What is the difference between POAS and ROAS?
ROAS divides revenue by ad spend. POAS divides gross profit by ad spend. On a 30% margin product a 5x ROAS is roughly a 1.5x POAS before shipping, fees and returns.
How do I calculate POAS?
Take revenue, subtract returns, apply your gross margin, subtract shipping, fulfilment and payment fees, then divide the result by ad spend. On £100,000 of revenue, 8% returns, a 60% margin and 10% fees, £20,000 of spend gives a POAS of 2.3x.
What is POAS bidding?
Bidding on profit rather than revenue. You send the platform gross profit as the conversion value, or set target ROAS per product from its margin, so it optimises toward the orders that make money rather than the ones that convert cheapest.
Is POAS the same as net ROAS or profit ROAS?
Near enough. All three divide profit by ad spend instead of revenue by ad spend. The difference is what gets deducted first: our calculator takes off returns, shipping, fulfilment and payment fees before dividing.
Does POAS account for incrementality?
Not by itself. POAS still assumes the platform caused every sale it claims. A holdout or geo test is the only way to establish how much of that revenue would have happened anyway.
What POAS should I scale on?
Set a floor above 1.0 that covers your overheads at the volume you plan to buy, usually between 1.5x and 2.5x. Below that floor, more spend means more loss however good the ROAS looks.