A profitability metric that measures the actual gross profit generated for every dollar spent on advertising, rather than just revenue. POAS = Gross Profit from Ads / Ad Spend.
POAS is more accurate than ROAS for D2C decision-making because it accounts for COGS. A brand with 60% gross margin and 4× ROAS has a POAS of 2.4× (i.e., $2.40 gross profit per $1 ad spend). POAS above 1× means ads are generating positive gross profit before fixed costs. Leading D2C brands set POAS targets by product category since high-margin products can support lower ROAS and vice versa.
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