ACOS (Advertising Cost of Sales) is the primary efficiency metric for Amazon Sponsored Ads campaigns. It measures how much of your ad-attributed revenue was consumed by ad spend.
Formula: ACOS = (Ad Spend ÷ Ad Revenue) × 100
Example: If you spend $200 on ads and those ads generate $1,000 in sales, your ACOS is 20%.
What's a Good ACOS?
A "good" ACOS depends on your margin and strategy:
- Break-even ACOS = your profit margin before ad spend. If you make 30% margin before ads, a 30% ACOS means you break even on ad-driven sales.
- Target ACOS should be below your break-even to remain profitable.
- Aggressive launch ACOS (above break-even) is acceptable when building sales velocity and ranking for a new product.
ACOS vs. TACOS
ACOS only measures ad revenue against ad spend — it ignores organic sales that ads may have influenced. TACOS (Total ACOS) divides ad spend by total revenue (organic + ad), giving a more complete picture of advertising efficiency.
How to Improve ACOS
- Pause keywords with high spend and zero or poor conversions
- Increase bids on converting keywords to grow their share
- Improve listing conversion rate (images, title, bullet points, price) so the same ad spend generates more sales
- Move from broad/phrase match to exact match on proven keywords