How to calculate POAS?

The answer to “what’s next” in digital marketing, outperforming any previous similar tech is POAS a boon for organizations struggling with their digital marketing campaigns. Giving you the most accurate metric measure of the ROI, it works in ways that make the bidding strategy piece of cake.

 

What exactly is POAS in google ads and how do you know if it makes you money?

Profit on Ad Spend (POAS) is an acronym for profit on ad spend. ROAS stands for Return on Ad Spend. The acronym POAS stands for Profit on Ad Spend. It’s an alternate better-upgraded version for the original ROAS, intended to be a better way to provide metrics. To calculate the POAS of your online advertising, divide the gross profit attributed to the online marketing channel by the ad cost. These figures are directly similar, therefore a POAS greater than one indicates that you have made money. 

Setting it up.

You may set up a POAS target in a variety of ways to cut down on your internet marketing costs. Keep in mind that profit tracking varies depending on your product line. 

POAS is a simple best practice that anyone can use and understand: If your gross profit exceeds your ad cost, you’ve made money. With ProfitMetrics, you can use POAS directly in Google, Facebook, and other paid marketing channels, allowing you to focus your time and resources on the ads that have the most impact on your bottom line. No guessing and complete transparency!

  • To figure out your gross margins, you’ll need to figure out the difference between your internal costs and the costs of Google Ads. You can manually calculate your gross margins or use a PPC Management software tool to link the data together.
  • Assign your gross margins to your ads; it is best to give the gross profit data to Google in order to get a more accurate view of your profitability. In Google Ads, you can use the Google Click ID (GCLID) or establish a goal in Google Analytics.

 

In Analytics, create an objective

A goal keep up in analytics is a trigger that activates when particular conditions are met, such as when someone watches a video, clicks on a link, or visits a specific page. So you can give that trigger a value, and in the instance of POAS, you can give it the gross margin. This allows you to allocate your margins to adverts. The margins from Analytics can then be imported into Google Ads.

 

Conclusion

One must have the data available at the marketing channels where they strive to reap the benefits of profit data and POAS. In other words, profit data is required in marketing channels such as Google Ads and Facebook Ads. You’ll be able to transfer smart shopping/bidding objectives to profit and do profit bidding using profit in Google Ads. POAS is a straightforward best practice that is easy to use and understand: If your gross profit is higher than your ad spends, you’ve made money.