Short answer
ROAS measures revenue per ad euro; POAS measures gross profit per ad euro. ROAS is easy to report, but POAS is what tells you whether you're actually making money, so steer by POAS and treat ROAS as a quick gut-check.
Follow the sale through to contribution.
Same revenue. A different contribution margin changes what you can afford to spend.
01Sales value does not tell you how much is left.
The difference that decides everything
ROAS only looks at revenue: spend €3,000 and get €12,000 in attributed revenue, and your ROAS is 4.0, whether the product carries a 15% or a 70% margin. POAS puts profit into the equation: it strips out cost of goods, shipping, fees and returns before it measures the return. Two campaigns with identical ROAS can have wildly different POAS.
That's why ROAS can glow green while the campaign quietly loses money. Across a catalog with varying margins, a ROAS-driven account pushes budget toward what sells most, not what earns most. A systematic, expensive mistake.
Follow the sale through to contribution.
Same revenue. A different contribution margin changes what you can afford to spend.
01Sales value does not tell you how much is left.
When to use which
Use ROAS as a quick reference at the campaign level when your products carry similar margins — it's easy to read and fine for comparing ads. But the moment budget has to be split across a catalog, POAS (or contribution margin as your conversion value) should take over.
In practice we steer by POAS and MER, and treat ROAS as an indicator, not the verdict. It moves the decision from "what sells" to "what earns", and that difference is what lands on the bottom line.
Frequently asked questions
Is POAS always better than ROAS?
As a basis for decisions, yes — POAS accounts for profit where ROAS ignores margin. ROAS is still useful as a quick reference at the campaign level, but budget decisions should be steered by POAS or contribution margin.
Can I use both POAS and ROAS?
Yes. Use ROAS for a fast read and for comparing ads with similar margins, and POAS/MER for the real budget decisions across your catalog. They complement each other.
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About the author
Nicklas Segatz Mortensen
Growth hacker and fractional CMO with 10+ years' experience and hundreds of millions in managed ad spend behind him. Background from larger Danish and international scale-ups, and from the agency world.
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