Google Ads and Shopify profit glossary
Plain definitions of the terms behind ad profitability — POAS, ROAS, break-even ROAS, contribution margin, cost of goods, offer IDs — each with its formula and a worked example.
All glossary
Break-even ROAS: formula, examples and a free calculator
Break-even ROAS = 1 ÷ returns-adjusted margin: 40% needs 2.50×, 25% needs 4.00×. The formula, a worked example, target ROAS and a free calculator.
Contribution margin per order: the number your ad targets should be built on
Contribution margin per order: price ex VAT minus unit cost, shipping you bear and payment fees. Adjust for returns; 1 ÷ that margin is your break-even ROAS.
COGS for Shopify stores: cost per item, and how ad profit uses it
Cost of goods sold (COGS) is what the units you sold cost you. In Shopify it comes from each variant’s cost per item × units sold, the figure that turns ad revenue into ad profit.
Gross margin per product: definition, and how it differs from ad profit
Gross margin per product is price minus cost per item: what a unit leaves before ads, fees and returns. Formula, worked example, and how it differs from POAS.
Offer ID (item ID): how Google Ads spend is tied to a Shopify product
An offer ID is the Merchant Center id Google Ads reports a product's cost against. Opteno reads the Shopify product and variant from it to tie spend to profit.
Performance Max product-level reporting: listing groups and the Products tab
Performance Max reports products in the Listing groups tab and the Products tab. Why their totals differ from the campaign row, and what profit is missing.
What is POAS? Profit on ad spend: formula, break-even and examples
POAS is gross profit after cost of goods divided by ad spend, and it breaks even at 1.00× for every product. The formula, a worked example and POAS vs ROAS.
What is ROAS, and what Google’s ROAS leaves out
ROAS is revenue divided by ad spend. Google Ads divides conversion value by cost on the click date; see what that leaves out, with a worked true-ROAS example.
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