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.
Start at break-even, not at a guess
Your POAS target is built on contribution margin. A POAS of 1 means the ads pay for themselves at the gross level, but the fixed costs (payroll, rent, software) still aren't covered. So the target has to sit high enough that the contribution margin after ads also covers the fixed costs and leaves the bottom line you're aiming for.
Work it out concretely from your own P&L: what's the margin, what are the fixed costs for the period, and what bottom line is the ambition? Out of that falls the POAS level the account needs to hit — not an industry number, but your own.
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.
Order POAS vs. customer POAS
There are two POAS conversations. At the order level: does this order make money here and now? At the customer level: does this customer make money over their lifetime? If you have strong CLTV, you can deliberately run a lower POAS (even below 1) on first purchases, because the repeat orders bring it home.
It's customer POAS that determines how aggressively you can scale. Without retention you have to be profitable on every order; with strong retention you can outbid the competition on acquisition and still make money over time.
Make the target operational
A POAS target is only useful if the platforms can optimize toward it. That requires contribution margin to be sent in as the conversion value (e.g. via Profitmetrics) and differentiated by margin, so bidding chases profit rather than revenue. Otherwise the target is a report, not a steering mechanism.
Frequently asked questions
What's a good POAS target?
There's no single number — it depends on your margin, fixed costs and growth ambition. Work it out from your own P&L: the target has to ensure the contribution margin after ads also covers the fixed costs and leaves the bottom line you want.
Can my POAS target be below 1?
On first purchases, yes, if your CLTV is strong enough that repeat orders bring it home. Customer POAS over the lifetime is what has to turn a profit — not necessarily POAS on the individual first order.
From insight to action
See how it applies in practice.
Website, channels and profit measurement
The Løgbutikken engagement covered the website, email, Meta, Google Ads and ProfitMetrics. The business grew and was subsequently acquired.
Read the caseMeasurement and customer economics
Discuss measurement and bidding
We review the values you measure and how they can inform budget decisions.
Choose a time30 minutes · No obligation
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.
Meet the team