ROAS can be misleading. Focus on POAS.
Create an efficiency boost for yourself and compared to your competition.
The future of steering on KPIs is about sending better data signals to Google.
Don't waste time on manual margin calculations. Automate POAS.
Increasingly the optimization options within Google Ads campaigns are disappearing. Therefore, it is becoming more about who can send the best data signals to Google themselves.
Luckily, more and more advertisers are experiencing the benefits of POAS (Profit On Ad Spend), compared to ROAS.
Do you include profitability? Then you create an efficiency boost for yourself, but also when compared to your competition. Finally, add POAS information to Smart Shopping Buckets to make better use of the Google Bid Simulator. Turn Google into a profit machine!
.png?width=620&height=700&name=Calculation%20POAS%20(3).png)
In the example, A is a brand bag, and B is a house brand bag. In ad A, the ROAS comes closest to the target. Therefore, ad A seems to perform better than ad B, where the ROAS significantly deviates from the objective.
You probably would have stopped ad B based on ROAS. That would be the wrong choice. In the end, if you look at the profitability of the ads, you see that ad B (POAS> 100%) wins over ad A. POAS <100%. In ad A your margin is smaller than your ad’s cost, and therefore you make a loss.
(Important to note: it could be that someone comes on your website after clicking on an ad for a specific product and then buys a different product with a different margin than the product you were advertising with. That is why we also speak of the margin per advertisement.)
.png?width=852&height=414&name=POAS%20Insights_illustration%20(1).png)
Don't waste time on complicated manual calculations. In Adchieve, you will get one full month of free insight into your POAS at any level: Per account, campaign, ad group, and/or product group. Three clear and direct new columns in your own Google Ads account.
