POAS & commercial bidding
What is POAS and why does it matter for ecommerce?
Why this matters
ROAS asks 'how much revenue did this spend generate?'. POAS asks 'how much profit did it generate?'. The first is a media metric. The second is a business metric. For ecommerce brands where margins vary widely across the catalogue, the gap between the two is where money is made or lost.
The formula is straightforward: POAS = (Revenue − COGS − Returns − Fulfilment − Discounts) ÷ Ad Spend. A POAS of 1.0 means you broke even on direct ad costs after product cost. Anything below 1.0 means the campaign lost money before you even paid rent, salaries or platform fees.
A worked example: a discount supplement priced at £18 with a 35% return rate, £6 COGS and £3 fulfilment generates roughly £6.30 net profit per sale. At a £12 CPA on Google Ads, that SKU is destroying margin even at a 1.5× ROAS. A premium SKU at £80 with 12% returns and £20 COGS at the same £12 CPA generates roughly £50: same media, very different outcome.
Brands that aggregate POAS at the campaign or account level miss this. Real POAS optimisation lives at SKU level, with margin and return data fed into bidding decisions.
How JudeLuxe approaches this
JudeLuxe's BOI™ methodology classifies every SKU by commercial role. Scale, Profit, Protect, Recovery, Gateway, and bids accordingly. Each role gets its own POAS target rather than a single blended number that hides the trade-offs.
Our pillar guide on POAS vs MER vs ROAS unpacks the maths and the implementation, and the POAS calculator lets you run your own numbers in two minutes.
Related reading: POAS vs MER vs ROAS: pillar guide.
Related questions
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