E-commerce Glossary

POAS (Profit On Ad Spend)

Profit generated per dollar spent on advertising.

POAS goes beyond ROAS by relating profit (not revenue) to ad spend. Formula: POAS = Gross Profit / Ad Spend. A POAS of 1.5 means every ad dollar generates $1.50 in profit. POAS avoids the trap of high ROAS on low-margin products. It's the most reliable metric for optimizing campaigns toward real profitability rather than volume.

Related terms

AOV (Average Order Value)Average amount spent per order in your store.See definition ARPU (Average Revenue Per User)Average revenue generated per user over a given period.See definition Blended CACAverage acquisition cost including all marketing channels.See definition Blended ROASOverall return on all advertising spend combined.See definition CAC (Customer Acquisition Cost)Total cost to acquire a new customer.See definition Churn RatePercentage of customers lost over a given period.See definition

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