Description

This is a daily report showing your profit on ad spend. It gives you an accurate view into how much money is actually going into your bank account on a daily basis.

Similar to ROAS, the Profit On Ad Spend (POAS) figure is a ratio showing how much profit you’re making for every dollar of ad spend.

Calculations used:

COGS = Cost per item (Shopify) x qty of products sold in that day

Hop Screenshots (3).png

Application

  1. Profit-Centric ROAS Approach: The report shifts the focus from traditional ROAS, which considers revenue, to a more profit-centric approach. It incorporates the CM1 metric, representing the profit generated for every dollar spent on advertising. This metric measures the effectiveness of advertising campaigns in driving profitable sales.
  2. Pricing Strategy Refinement: The inclusion of COGS and CM1 Shopify Payments transaction fees allows businesses to assess the impact of advertising on the overall profitability of each product. This insight informs pricing strategy refinement, helping e-commerce stores set prices that not only cover costs but also contribute significantly to profit margins. Adjusting prices based on profitability analysis ensures a sustainable and lucrative product offering.
  3. Strategic Advertising Adjustments: The report empowers businesses to make strategic adjustments to their advertising campaigns. By identifying which channels or campaigns contribute most effectively to profitability, e-commerce stores can refine targeting, messaging, or creative elements to enhance the performance of high-impact advertising initiatives.
  4. Performance Trend Identification: Over time, the report helps identify trends in the relationship between ad spend, sales, and profitability. Businesses can uncover patterns in the effectiveness of advertising efforts during specific periods or under particular market conditions.

— Daily ROAS report

Metrics (need to add sources they were taken from)