ACoS and TACoS

Introduction to important Advertising metrics

What is ACoS

ACoS = Advertising Cost of Sale

The ACoS is a metric to help you understand how much you spend on advertising campaigns in comparison to your Ad Sales. 

It helps you determine whether your PPC Campaigns were cost-efficient or not.

How to calculate ACoS 
ACoS = Total Ad Spend / Total Sales

What is TACoS

TACoS = Total Advertising Cost of Sale

With the TACoS you can calculate your advertising spend relative to your total revenue (organic & paid).

How to calculate TACoS

How to interpret high or low TACoS

The goal of measuring your TACoS is to understand if your paid sales are having a good effect on your organic sales and help drive those up. 

Basically, you want to achieve a healthy sales cycle, where your paid sales help generate positive reviews and ranking so that your organic visibility increases. 

High TACoS

A high or increasing TACos is usually indicating that your paid sales (Ads) are not driving an uplift in your organic sales. 
As an action step, you should optimize your campaigns and make sure that ASINs with high impressions have a good conversion rate. ASINs with high impressions but a low conversion rate need content optimization for better performance. 

Low TACoS

A decreasing or flat TACoS is usually indicating that your advertising campaigns are generating strong sales. 
That again means that your organic sales are becoming a more critical role when it comes to your total revenue.