Technology keeps on evolving with every second that we progress and we need to keep up with it or risk being left out of the race. Trends in technology can take over by a storm you might just be getting used to one thing and then come to find out that there is something new in the market that is better in almost every aspect than the one you just got the hang of. POAS is something similar, and those who are in the digital market (well today, who isn’t) have definitely come across this term.
What is it and what does it do?
Short for Profit On Ad Spend, POAS marketing is a metric that allows you to track your profits on campaigns with much more accuracy. This in turn allows you to plan and execute your campaigns more effectively and efficiently, and you end up focusing on areas that require attention. Simply said, it calculates the return on your advertising investment, most accurately. The next big thing in PPC marketing is POAS marketing, and now is the time to jump on board. You may have begun to hear about POAS, not only from Google advertisements but also from profit bidding.
Why do you need it?
You want to know if your ad campaign is profitable, but what is the best approach for calculating the return on your ad investment? When you look up the definition of ROI, it appears that there isn’t one, and the difference is in the way cost is computed. There are methods other than POAS that can be used to calculate the profit on your campaigns, but may not have the appropriate results which can be misleading. This would prevent you from making the right adjustments to your campaign strategy and in turn preventing you from making the most possible profit. This is one of the main reasons why you need to shift to POAS marketing.
The formula to calculate POAS is simple- it is the profit ÷ the cost of advertising.
Marketing teams may gain the most accurate picture of campaign profitability by using a POAS metric.It’s a model that the majority of e-commerce companies are using or inclining towards as long as it serves their business aims.
Does POAS become a limitation?
POAS, which is about direct, revenue-optimized performance, may be less effective depending on your aims. The goal of POAS as a campaign metric is to be able to provide businesses with and manage fluctuating margins. It’s less beneficial for products with slight profit margin variations. For example, if you only have one product or know that all of your products have a 20% margin, you can easily keep track of profits.
POAS is a simple to use and understand direct metric in online advertising. If you begin to use the POAS statistic in your ad campaigns, you will undoubtedly exceed your competitors in terms of lead generation and prospecting. So maybe now is the time to make the switch and take the risk of a huge influence on your business by partnering with POAS!