Ask five Amazon sellers which advertising metric matters most and you will get ACoS from some and TACoS from others. Both are right, because they answer different questions. Here is what each one tells you, where each one misleads, and how we use them together when running Amazon Ads accounts.
What ACoS tells you
ACoS (Advertising Cost of Sales) is ad spend divided by the sales that Amazon attributes to those ads.
For example, if a campaign spends £200 and generates £1,000 in attributed sales, its ACoS is 20%. It is a campaign-level efficiency number: it tells you how much you paid for each pound of sales the ads were credited with. It does not see organic sales at all.
What TACoS adds
TACoS (Total Advertising Cost of Sales) is ad spend divided by your total sales, both ad-attributed and organic.
Using the same £200 of spend, if the product sold £4,000 in total that period, TACoS is 5%. This tells you how dependent the business is on advertising. If TACoS falls while total sales hold or grow, your ads are probably helping build organic rank and repeat demand. If TACoS climbs while total sales stay flat, you are paying more to stand still.
| ACoS | TACoS | |
|---|---|---|
| Formula | Ad spend ÷ ad-attributed sales | Ad spend ÷ total sales |
| Level | Campaign, ad group, keyword | Product, brand or account |
| Best for | Bid and campaign decisions | Budget and strategy decisions |
| Blind spot | Organic sales and margin | Slow to react to campaign-level problems |
Why ACoS alone can mislead you
- A low ACoS can hide under-investment. A campaign that only bids on your own brand name will show a great ACoS, but it is not finding new customers.
- A high ACoS is not always bad. A new product often needs a higher ACoS for a while to earn its first sales and reviews.
- ACoS ignores your costs. A 25% ACoS is profitable on one product and a loss on another.
Start with your break-even ACoS
Break-even ACoS is the share of the selling price left after product cost, Amazon fees, fulfilment and any other variable costs, but before advertising. If a product sells for £25 and £8 is left after those costs, your break-even ACoS is 32% (8 ÷ 25). Spend above that loses money on each ad-driven sale, unless you have a deliberate reason to accept it, such as a launch.
The figures here are illustrative. Use your own numbers, product by product.
How we use both numbers
- Set targets by product stage. Launch products can run above break-even for a defined period. Mature products should aim to push TACoS down over time.
- Use ACoS inside the account. It guides bids, search term clean-up and which campaign types deserve more budget.
- Use TACoS above the account. It guides how much to invest overall and whether ads are building organic sales or replacing them.
- Check profit after ads. Both metrics are only a means to that.
Common mistakes
- Judging a single day or week. Attribution takes days to settle, so the most recent days usually under-report sales.
- Comparing different campaign types. Brand defence, prospecting and product targeting campaigns have very different normal ACoS ranges.
- Cutting ads when TACoS rises without checking why. A stock-out, a lost Buy Box or a price change can raise TACoS with no problem in the ads themselves.
A simple weekly routine
- Check TACoS and total sales by product. Note which moved.
- Review ACoS by campaign against each product's break-even.
- Clean up search terms, add negatives and adjust bids.
- Re-check stock, price and Buy Box on products where the numbers moved unexpectedly.