ROAS vs POAS: Which Grows Your eCommerce Store? (2026)

ROAS (return on ad spend) measures revenue per rand of ad spend. POAS (profit on ad spend) measures the profit per rand, after you subtract product cost, VAT, shipping, and fees. The difference matters because a high ROAS can still lose you money. For growing an eCommerce store, POAS is the metric to optimise for, while ROAS stays useful as a quick gauge. Track both. POAS makes the call. Here is how to calculate each, and how to boost your POAS, from V8 Media, the team behind R2+ billion in client sales.

A 4.6x ROAS can still bankrupt you

Here is the trap that catches most store owners. You check Ads Manager. ROAS says 4.6. You feel like a genius.

Then you check your bank account. It is empty.

How? Because ROAS only counts revenue, not what that revenue cost you. Revenue is not profit. This guide cuts through the fluff on the two metrics that decide whether your ads actually make you money.

What is ROAS?

ROAS stands for Return on Ad Spend. It answers one question: for every rand I put into ads, how many rand of revenue came back?

ROAS = revenue from ads ÷ ad spend.

Say you spent R1 million on ads over three months and generated R4.6 million in revenue. Your ROAS is 4.6x. For every R1 in, R4.60 back. Those numbers feel great. And that is exactly the problem.

The catch with ROAS

ROAS does not count your costs. Not the cost of goods. Not VAT. Not salaries, shipping, or software. It is like bragging about your salary before tax. Looks big. Not what you take home.

So a 4.6x ROAS might be brilliant, or it might be a slow-motion bankruptcy. ROAS alone cannot tell you which. That is the mistake we see over and over: founders optimising for a number that ignores most of their costs. This is where POAS comes in.

What is POAS?

POAS stands for Profit on Ad Spend. As Channable and ProfitMetrics both put it, the key difference is simple: ROAS uses revenue, POAS uses profit. POAS counts what is left after all the costs, so it tells you what you actually keep.

POAS = profit ÷ ad spend.

Back to the example. Revenue is R4.6 million. Say your total costs (product, VAT, shipping, fees, salaries) come to R3 million. That leaves R1.6 million in profit. Your ad spend was R1 million.

• POAS = R1.6 million profit ÷ R1 million ad spend = 1.6x.

So for every R1 you spend on ads, you keep R1.60 in profit. That is money in the bank, not revenue on paper. That is the number that actually matters.

ROAS vs POAS, side by side

Framing of ROAS as revenue-based and POAS as profit-based per Channable and ProfitMetrics 2026 guides.

Why POAS wins for growth

Revenue alone will not keep your business alive. You can shout that you did R4.6 million in revenue, but if your costs were also R4.6 million, you just spun your wheels for three months. That is winning the battle and losing the war.

POAS gives you the full picture. A high POAS means your business is not just making money, it is keeping money. It is the difference between a store that looks successful and one that is. With POAS guiding you, you scale the campaigns that bank cash, not the ones that just look good in a screenshot. As Tracklution put it, POAS beats ROAS for sustainable growth because it steers on profit, not vanity.

When POAS matters most

POAS is not equally important for every store. It delivers the biggest edge where there is real margin complexity to work with. Per ProfitMetrics, that is when:

• Your margins vary a lot across products.
• Your highest-revenue products are not your most profitable ones.
• Your ad spend is scaling but profit is not keeping pace.

If that sounds like your store, ROAS is actively misleading you, and POAS is the fix. If you sell one product at one margin, ROAS and POAS move together and the gap matters less. Either way, you need to know your profit margins first, because POAS is impossible to calculate without them.

A tale of two campaigns

Numbers make it real. Here is an illustrative pair, the kind of split we see in audits. Two campaigns, same R10,000 ad spend.

• Campaign A: R50,000 revenue. A 5x ROAS. Looks like the clear winner. But it pushed a low-margin product, and after costs it returned R8,000 profit. POAS of 0.8x. You lost money.
• Campaign B: R30,000 revenue. A 3x ROAS. Looks worse. But it pushed a high-margin product, and after costs it returned R15,000 profit. POAS of 1.5x.

ROAS says scale Campaign A and kill B. POAS says the exact opposite. And POAS is right. Optimise on ROAS here and you pour budget into the campaign that loses money. That is not a small mistake. That is the whole game.

How to boost your POAS

Once you track POAS, you can grow it. Here are the levers that move it most.

1. Negotiate your COGS down. Every rand you shave off product cost goes straight to profit. Do not accept your supplier's first price. Haggle.
2. Cut the fat. Audit every expense. Unused software, expensive shipping, service contracts. Trim what you do not need so more of what you make stays.
3. Get your pricing right. Too low and your margin shrinks. Too high and you scare buyers off. Test bundles and value-based pricing to find the sweet spot.
4. Push high-margin products. Put your ad spend behind the products that make you the most per sale, not the ones that just sell a lot.
5. Raise customer lifetime value. Loyal customers buy again at almost no acquisition cost, which lifts POAS fast. See our guide on eCommerce LTV.
6. Optimise the funnel. A leaky checkout wastes ad spend. Tighten landing pages, checkout, and follow-up so more clicks become profit.

This is exactly the lens we run client Meta Ads and Google Ads through. Scale on profit, not on a vanity number.

How to actually track POAS

ROAS is easy. Ads Manager hands it to you. POAS takes a little setup, because it needs your cost data. Three ways to do it:

• The simple way: a monthly spreadsheet. Pull revenue and ad spend, subtract your real costs, divide profit by ad spend. Rough, but it beats flying blind.
• The store-app way: tools like ProfitMetrics or Triple Whale plug into Shopify and work out POAS automatically by pulling your cost of goods and fees.
• The agency way: a proper profit dashboard that ties ad spend to true margin per campaign. This is what we build for clients so every decision is made on profit.

Start simple if you must. A rough POAS beats a perfect ROAS that lies to you.

Why you should still track both

POAS is the priority, but do not throw ROAS away. ROAS is a fast read on whether your ads are performing at all. Read together, the two tell the full story:

• High ROAS, low POAS: you are selling, but your costs are eating the profit. Fix the costs or the product mix.
• Lower ROAS, high POAS: fewer sales, but each one is genuinely profitable. Often the healthier place to be.

Track both. Let POAS make the call. Fold both into the monthly KPIs every store should track.

Think long-term, not quick wins

It is easy to get high on a big ROAS number. But the goal is not to make sales. It is to build a profitable business that lasts. Chasing ROAS is chasing quick wins. Building POAS is building a business that can survive rising ad costs and keep growing.

ROAS is a dashboard light. Useful. But it does not tell you if the engine is actually healthy. POAS does.

The verdict: which should you focus on?

Both matter. But if you are serious about growing a profitable eCommerce business, POAS is the priority. ROAS tells you how your ads are performing. POAS tells you whether that performance is actually making you money. Track both. Let POAS guide your decisions. Busy is not the goal. Profitable is.

How V8 Media uses POAS

Most agencies chase a shiny ROAS and call it a win. We do not. We set up profit tracking so every client campaign is judged on POAS, then we scale what banks real money. It is the same thinking behind everything we run, from Meta Ads to Google Ads. The goal is never the biggest ROAS screenshot. It is the most profit in your account.

Frequently asked questions

What is the difference between ROAS and POAS?

ROAS measures revenue per rand of ad spend. POAS measures profit per rand, after subtracting product cost, VAT, shipping, and fees. ROAS shows sales; POAS shows what you actually keep.

How do you calculate POAS?

POAS = profit ÷ ad spend. Take revenue, subtract all costs (COGS, VAT, shipping, fees) to get profit, then divide by what you spent on ads. A POAS of 1.6x means R1.60 profit for every R1 spent.

Is POAS better than ROAS?

For growing a profitable store, yes. POAS accounts for costs, so it cannot hide a money-losing campaign behind a high revenue number. ROAS is still useful as a quick performance check.

What is a good POAS?

Anything above 1x means your ads are profitable, since you keep more than you spend. The right target depends on your margins and growth goals, but consistently above 1x is the baseline for healthy, scalable ad spend.

Should I track both ROAS and POAS?

Yes. ROAS is a fast gauge of ad performance; POAS reveals real profitability. A high ROAS with a low POAS is a warning sign. Track both, and let POAS guide your budget decisions.

How is POAS different from profit margin?

Profit margin is the profit on a sale as a percentage. POAS measures profit specifically against your ad spend. Margin tells you if the product is profitable; POAS tells you if the advertising behind it is.

What tools calculate POAS?

For Shopify stores, apps like ProfitMetrics and Triple Whale calculate POAS automatically by pulling your costs. You can also track it in a monthly spreadsheet, or have an agency build a profit dashboard.

Does POAS work for both Google Ads and Meta Ads?

Yes. POAS applies to any paid channel. Calculate profit from the sales a channel drives, then divide by what you spent on that channel. It works for Google Ads, Meta Ads, TikTok, anywhere you spend.

Why is my ROAS high but I am not profitable?

Because ROAS ignores your costs. A high ROAS only means revenue beat ad spend, not that you kept anything after product cost, VAT, shipping, and fees. Check your POAS. It will show where the profit is leaking.