Marketing metrics glossary

What is ACOS? (Advertising Cost of Sales)

ACOS is the share of your advertising-driven revenue that you spend on advertising. It is the headline efficiency number for Amazon PPC and paid search, the figure a client uses to judge whether the ad budget is working.

ACOS = Ad spend ÷ Ad sales × 100

How to read ACOS

A lower ACOS means more efficient spend. A 25% ACOS means you spent $25 in ads for every $100 of ad-attributed sales. A 50% ACOS means half of the ad-driven revenue went straight back into ads. Because it is a cost ratio, "down" is good, the opposite of most metrics on a report, which is exactly why it is worth explaining to clients rather than leaving as a bare number.

What counts as a good ACOS?

The only honest answer is: it depends on margin and goal. Your break-even ACOS equals your profit margin: keep 30% after cost of goods and Amazon fees and a 30% ACOS breaks even. Below that you are profitable on ad sales; above it you are buying rank or volume on purpose.

How to lower ACOS

ACOS comes down when you cut wasted spend or lift conversion:

On Amazon the search-term report is where those negative-keyword candidates are found, which is why agency reporting that surfaces them per campaign is worth more than a headline ACOS on its own.

ACOS, ROAS and TACoS

ACOS and ROAS are inverses: a 25% ACOS is a 4x ROAS. Amazon leads with ACOS, Google and Meta with ROAS, so a cross-channel report usually carries both. TACoS (Total ACOS) compares ad spend to total sales, including organic, so it shows whether advertising is growing the whole business, not just buying ad-attributed orders.

Related metrics

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FAQ

ACOS questions

What is a good ACOS on Amazon?

A good ACOS depends on your profit margin. Your break-even ACOS equals your product margin: if you keep 30% after cost of goods and fees, a 30% ACOS breaks even and anything below it is profitable. Most Amazon Sponsored Products accounts run between 15% and 30%. A launch campaign may accept a higher ACOS to win rank, while a mature best-seller is pushed lower. There is no single "good" number, only good relative to margin and goal.

How do I lower my ACOS?

Lower ACOS by cutting wasted spend and improving conversion. Add the high-ACOS, no-conversion search terms as negative keywords, tighten or lower bids on inefficient targets, move proven converters into tightly-matched exact campaigns, and improve the product listing so more clicks convert. On Amazon, the search-term report is where the negative-keyword opportunities live.

What is the difference between ACOS and ROAS?

ACOS and ROAS are two views of the same thing. ACOS is ad spend as a percentage of ad sales; ROAS is ad sales as a multiple of ad spend. They are inverses: a 25% ACOS is the same as a 4x ROAS. ACOS is the standard on Amazon, ROAS on Google and Meta, so a cross-channel agency report usually shows both. TACoS is different again: it compares ad spend to total sales, not just ad-attributed sales.