Is it Time to Stop Bidding on ROAS (and Start Bidding on POAS)?

The screenshot below is taken from a client I work with who have 1,000+ SKUs across multiple price-points and categories. And yes, revenue tracking is ±/- 2% of what we’re seeing on their Shopify data. Not perfect, but close enough.

£50k-ish spend the past 30 days. £900k-ish revenue. My client accomplished this through a transition to POAS-based spending (Profit On Ad Spend). And it’s not just about brand bidding. The majority of sales are through Pmax… and I usually hate Pmax, but for this brand? They’re killing it. Focusing in on what products are the most profitable sounds obvious doesn’t it? Let’s dig in.

For years, ecommerce brands have used ROAS (Return on Ad Spend) as the go-to metric for paid media success. It’s simple: if you spend £1,000 on ads and make £4,000 in revenue, you’ve got a 4.0 ROAS. Great, right?

Not always.

Here’s the problem: ROAS tells you what your customer spent, not what you made. And if you’re running a high-volume ecommerce operation with mixed margins, bundles, discounts and varying shipping costs, that 4.0 ROAS might actually be losing you money.

Enter POAS: Profit on Ad Spend

POAS (Profit on Ad Spend) is the smarter, cleaner metric for brands who care about scaling profitably. Instead of measuring revenue return, it focuses on the actual profit generated by each campaign or product line.

ProfitMetrics.io is one of the standout tools enabling this shift. It plugs directly into your Shopify store and ad platforms, capturing real-time profit data per order, per SKU and per campaign. That means you’re no longer relying on guesswork or hoping that a high ROAS equals healthy margins.

With ProfitMetrics, you're not just seeing how much customers spend. You're seeing how much money you keep—and that’s what you should be bidding against.

Meta Now Offers POAS-Like Bidding

The big platforms are catching on. As of June 2024, Meta is rolling out Value Optimization for Profit Margins in beta, giving advertisers a native way to optimise ad delivery toward higher-margin sales.

Jon Loomer recently broke this down in his article here, showing how Meta’s QVT (Quality Value Time) system can now be layered with real margin data. That means Meta can prioritise showing your ads to people more likely to convert profitably, not just expensively.

This opens up a new level of targeting: where you’re not just chasing whales, but profitable whales.

Why This Matters for Your Ecommerce Brand

If you’re running ads without margin visibility, you’re flying blind. Especially important for retailers with larger SKU volumes (more stock, more inventory to shift) High-ticket products with low margins can skew your entire performance model. And platforms like Google and Meta don’t care what your margin is, they just care about conversion signals unless you feed them better data.

Tools like ProfitMetrics allow you to pipe in your real profit data and then sync it with Google Ads, Facebook Ads, and other platforms. essentially giving your bidding engine night vision goggles.

When combined with Meta's evolving optimisation capabilities, you're not just reacting to performance… you’re shaping it.

Growth Takeaway:

Is ROAS outdated? Could POAS be your new operating system?

It depends. For DTC brands with sub 100 products? With pricing aligned, whether that be cut-price or luxury? POAS could just complicate the process. My job is to simplify the process. However, if you’re a retailer with a depth of product range at a variety of price points I’d certainly recommend reviewing the tools and data available to you in order to push profit data into Google Ads (and via conversion api into Meta).

• Use tools like ProfitMetrics.io to surface your real-time profit data.

• Sync this data to your ad platforms so you can bid based on what you earn, not what your customer spends.

• Leverage Meta’s new Profit Margin optimisation beta when available. it’s a game-changer.

If you're serious about growing profitably, maybe it's time to ditch ROAS and start scaling with POAS?

There’s Reaktion’s Shoptimizer for POAS tracking and optimisation too….

Take a look at Reaktion too. I haven’t used their platform with a client yet but their use of server-side tracking alongside the ability to push your profit data into your ad platform looks really useful. Already using Reaktion? Do let me know, I’d love to hear your experience so far.