Marketing Economics glossary

What Is Profit on Ad Spend (POAS)?

Definition

Profit on ad spend measures profit or contribution attributed to advertising relative to advertising cost.

How Profit on Ad Spend (POAS) Works

A common version divides contribution profit before ad cost by ad spend, though businesses use different definitions. The exact numerator must be stated.

A Simple Example

If attributed orders produce $120,000 of contribution before advertising on $40,000 of ad spend, POAS is 3.0× under that definition.

Why Profit on Ad Spend (POAS) Matters

POAS incorporates product economics that revenue-based ROAS leaves out.

Common Misreading

There is no universally standardized POAS formula. Different cost inclusions can make two reported values incomparable.