# Profit on Ad Spend

Revenue on Ad Spend, or ROAS, has been used to measure ad performance, focusing solely on the revenue generated. However, this approach often overlooks other crucial aspects, such as profit. Profit on Ad Spend, or POAS, helps you evaluate not just revenue, but how much actual profit advertising generates, providing a clearer picture of ad effectiveness.

For information about how you can set up **Profit on Ad Spend**, [refer to this article](https://helpcenter.channable.com/manage-improve-product-data/insights/profit-on-ad-spend/how-to-set-up-profit-on-ad-spend). If you have additional questions, please [visit our FAQ article](https://helpcenter.channable.com/manage-improve-product-data/insights/profit-on-ad-spend/frequently-asked-questions-about-profit-on-ad-spend).

### What is Profit on Ad Spend?

Unlike **ROAS**, which only considers revenue, **Profit on Ad Spend** provides a measure of profitability by considering other associated costs, including product costs, shipping, payment fees, and other expenses. This allows you to evaluate the true effectiveness of their ad campaigns.

Let’s take a look at some simplified formulas:

* **Revenue on Ad Spend (ROAS)** = (Revenue / Ad Cost) × 100%
* **Profit** = Revenue — All Costs
* **Profit on Ad Spend (POAS)** = (Profit / Ad Cost) × 100%

Calculating 100% accurate profit is challenging because most regularly lack access to all cost data at the product or order level. However, even a simplified profit calculation *like just using the buying price* offers more transparency into advertising strategies compared to relying solely on revenue.

### Profit on Ad Spend in Channable Insights

Our feature lets customers use **Profit** and **Profit on Ad Spend** metrics on a product level in Channable. Customers can choose one or several Cost fields that will be taken into account in the calculations.

#### Formulas we use:

* **Gross profit** = Conversion value — (POAS Cost field 1 + POAS Cost field 2 + …) \* Conversions
* **Net profit** = Gross Profit — Ad Cost
* **Profit on Ad Spend** = Gross profit / Ad Cost \* 100%

### Profit on Ad Spend Availability

Currently, **Profit on Ad Spend** metrics are only available on Google Ads insights dashboards. If you’re interested in using Profit on Ad Spend for other channels, [contact our support team](https://app.gitbook.com/s/UAGSVlvcNsqEqVUgr0tD/contact-support) to express your interest.


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