2026-07-05
Stop Bidding on Revenue: POAS for Dutch E-commerce (2026)
A high ROAS measures revenue, not profit — so Smart Bidding happily buys you cheap, discounted, high-return orders that look great on the dashboard and lose money in your P&L. Feed it profit instead, and it starts hunting margin.
Your Google Ads ROAS is high but your profit is low because ROAS only knows one thing: revenue divided by ad spend. It never sees your COGS, your shipping, your returns or your discounts. So when you let Smart Bidding optimise to revenue, it does exactly what you told it to — it chases the biggest carts, which in a discount-heavy market are often your worst orders. This piece is about the fix Dutch e-commerce keeps sleeping on: bidding on profit (POAS) instead of revenue, and how to actually push product margin into the algorithm.
The short version
- ROAS optimises for revenue, not margin. Fed only revenue, Smart Bidding over-indexes on high-revenue, low-margin, high-return products — and you scale straight into a profit ceiling.
- POAS = Profit on Ad Spend — contribution margin per €1 of spend, after COGS, returns, shipping, fees and discounts. It's the number that survives your P&L.
- The move that actually matters: bid on profit. Assign a different profit value to each conversion and Smart Bidding starts prioritising high-margin products and accounting for product-level return rates.
- You need clean, server-side tracking first. If conversions leak to Safari's ITP and ad blockers, your profit signal leaks with them.
- The Netherlands is the perfect test bed — huge, mature, competitive, and full of discount-trained shoppers who make revenue-bidding especially dangerous.
The Dutch paradox: growth on top, shrinking margins underneath
The Dutch e-commerce market is roughly €36.5bn and now makes up around 31% of all retail[1]. Almost everyone shops online here — about 17.5M online shoppers, which is very nearly the entire population[1]. And they're spending more per head: average online spend now runs well over €2,000 a year[9], with 38% of shoppers now spending €50+ per order while cheap sub-€10 orders have collapsed to just 7% of the market[1].
Here's the paradox. The market keeps growing — it's forecast to compound at roughly 7.7% a year through 2031[2]. Sounds like a rising tide. But growth pulls in competitors, competitors bid up the auction, and the auction eats your margin. You can be posting record revenue and a healthy ROAS while your actual contribution profit quietly slides. Top line up, bottom line flat. If that's your store, the metric you steer by is probably the problem.
Why ROAS quietly optimises for your worst customers
ROAS measures revenue against ad spend and nothing else. That's the whole flaw. When you hand Smart Bidding a target ROAS and feed it revenue as the conversion value, you're telling the algorithm: "go find me big carts." It obeys. But a big cart isn't a profitable cart.
In practice the algorithm over-indexes on high-revenue, low-margin products — the discounted lines, the stuff with a high return rate, the loss-leaders. Those look fantastic in a revenue-weighted model and terrible in your accounts. So when you try to scale on ROAS, you hit a ceiling: the algorithm has already crammed your budget into cheap, marginal sales, and there's nowhere profitable left to push[4].
Tell Smart Bidding to chase revenue and it will happily buy you a warehouse full of discounted, high-return orders. It's not broken. It's doing exactly what ROAS asked.
And the ROAS you're steering by is usually overstated on top of that. Run proper incrementality tests and true iROAS almost always lands below the platform-reported figure[6] — the platform credits itself for sales that would have happened anyway. So you're optimising a revenue number that (a) can't see margin and (b) is inflated. For the full breakdown of that second problem, read why platform ROAS overstates profit — it's the foundation this article builds on.
POAS: the metric that survives your P&L
POAS — Profit on Ad Spend — is the honest version. It measures contribution margin per €1 of ad spend, calculated after COGS, returns, shipping, fees and discounts, where plain ROAS just takes gross revenue over spend[3]. Same denominator, completely different numerator. ROAS tells you how much revenue an ad bought. POAS tells you whether the campaign actually earned anything.
It sits between the two other numbers you should know. ROAS is per-channel and revenue-only. MER (Marketing Efficiency Ratio) is blended — total revenue over total marketing spend, straight from your accounts, no attribution to game. POAS is the profit-aware middle layer: granular enough to bid on, honest enough to trust.
| ROAS | POAS | MER | |
|---|---|---|---|
| What it measures | Gross revenue ÷ ad spend | Contribution profit ÷ ad spend | Total revenue ÷ total marketing spend |
| Sees your margin? | No | Yes — after COGS, returns, fees | No — pair with margin |
| Scope | Per channel / campaign | Per channel / product | Blended, whole business |
| Good for | Tactical steering (flawed) | Bidding on profit | Reconciling with the P&L |
ROAS vs POAS vs MER. POAS is the only one you can both bid on and trust. Source: Tracklution, 2026.
The real unlock: teach Google Ads to bid on profit
This is the part most people miss. POAS isn't just a dashboard metric to admire in a monthly report — it's a bidding input. Instead of passing revenue as the conversion value, you pass profit. You assign a different profit value to every conversion, so Smart Bidding stops treating a €200 discounted, high-return order and a €200 full-price, high-margin order as identical[5].
Once profit is the value, the algorithm's incentive flips. It starts prioritising high-margin products and factoring in product-level return rates[5] — because a line that gets returned 40% of the time now carries a lower expected profit value, so it gets bid down automatically. You didn't build a rule for that. The margin math did it for you.
Google supports this natively. Value-based bidding optimises to whatever you set as the conversion value — so when that value is profit, your target-ROAS strategy is effectively bidding on a profit basis, not a revenue one[7]. Same machinery you already use, pointed at a better target. The algorithm goes from hunting discount-chasers to hunting the customers who actually make you money.
How to set it up without breaking it
Bidding on profit is powerful and unforgiving. Wrong margin math or leaky tracking, and you've just taught the algorithm a lie very efficiently. Here's the order that works.
| # | Step | Why it matters |
|---|---|---|
| 1 | Calculate contribution margin per product: price − COGS − shipping − expected returns. | This is the number you're going to bid on. Get it wrong and everything downstream is wrong. |
| 2 | Push profit into the dataLayer on purchase, alongside value, transaction_id and items. | Standard e-commerce dataLayer already carries value; you're adding a profit field next to it[7]. |
| 3 | Send it server-side via a GTM server container. | Client-side tags lose a big share of sessions to Safari ITP and ad blockers — server-side is what gets the profit data to Google reliably. |
| 4 | Set profit as your conversion value, or apply conversion value rules. | This is what turns POAS from a report into a bidding signal[7]. |
| 5 | Give it a ramp before you optimise aggressively — Google recommends roughly a 4-week window, and guidance suggests waiting about 3 conversion cycles. | The model needs enough profit-weighted data to learn from before its bids mean anything[7]. |
| 6 | Don't be thrown by the 2026 bidding-strategy renaming — check the current label in your own account. | Google is relabelling Smart Bidding strategies through 2026; the names on screen change, the underlying logic doesn't[7]. |
The POAS setup sequence. Source: Google Ads Help, 2026; Optmyzr, 2026.
Gotcha: POAS is only as good as the conversions that reach Google. If purchases are silently dropping before they hit the pixel, your profit signal is dropping with them — and Smart Bidding learns from a skewed sample. Run a free tracking checker first to confirm your conversions actually fire before you trust them to carry margin data.
What to expect — honestly
The clean win is this: POAS shifts budget away from low-margin products and toward high-margin ones without raising your spend, and it opens scaling headroom exactly where ROAS used to hit a wall[4]. Same money, redistributed toward orders that keep their profit after the product ships. That's the mechanism — nothing mystical.
How big does that get? One vendor case study — treat this as a vendor claim, not a typical result — reports Closure London hitting £6.19 of net profit per £1 of spend at an 83.51% blended contribution margin in May 2026[8]. Those are the numbers of a very high-margin brand with disciplined data, not what an average store should expect. Take it as a proof of the ceiling, not a promise.
Because here's the honest bit. POAS is not a magic button. Bad margin math will feed the algorithm garbage with total confidence. Dirty tracking will corrupt the profit signal before it ever reaches Google. Fix the plumbing and the margins first — then the profit-bidding does its job.
The bottom line
ROAS was never a profit metric, and steering by it in a discount-heavy, competitive market like the Netherlands quietly pushes budget toward your worst orders. POAS fixes the incentive: bid on contribution margin, feed profit into Smart Bidding as the conversion value, and let the algorithm hunt margin instead of revenue. It only works on clean, server-side tracking and honest margin numbers. Get those right and you get scaling room that a revenue target simply can't reach.
FAQ
Sources
- Landmark Global — E-commerce in the Netherlands 2026. landmarkglobal.com
- Mordor Intelligence — Netherlands E-commerce Market, 2026. mordorintelligence.com
- Tracklution — POAS: Profit on Ad Spend, 2026. tracklution.com
- Smarter Ecommerce — Top PPC Platforms That Enable True POAS Bidding, 2026. smarter-ecommerce.com
- ProfitMetrics — POAS bidding & product-level profit values, 2026. profitmetrics.io
- Sellforte — What Changes When Ecommerce and Retail Teams Switch to Incremental ROAS, 2026. sellforte.com
- Google Ads Help — Value-based bidding & conversion value rules, 2026. support.google.com; Optmyzr — Value-Based Bidding Guide, 2026. optmyzr.com
- JudeLuxe — POAS vs MER vs ROAS: Closure London case study (agency vendor claim), May 2026. judeluxe.com
- Searchlab — E-commerce Statistics 2026 (Thuiswinkel.org data, avg. annual spend per Dutch shopper). searchlab.nl