ACOS meaning
ACOS is Advertising Cost of Sales, the headline efficiency figure in Amazon's ad console. It answers one question: for every dollar of sales your ads brought in, how many cents did the ads cost?
Ad spend ÷ ad-attributed sales × 100$118 spend ÷ $540 sales = 21.9% ACOSA lower ACOS means each ad sale cost less. A 20% ACOS means you paid $0.20 in clicks for every $1.00 of ad sales. Run your own numbers in the ACOS calculator.
Which sales count
Amazon credits a sale to an ad when the buyer clicked it and then bought within the attribution window. For sellers that window is 7 days on Sponsored Products and 14 days on Sponsored Brands and Sponsored Display. A sale counts if it was your advertised product or, on most reports, another product of yours bought after the click.
Two consequences. The last week's ACOS is always too high, because sales are still arriving for clicks you already paid for. And a single day's ACOS swings, so judge a term on at least a week of clicks, better a month.
ACOS vs ROAS
ROAS, return on ad spend, is ACOS upside down: ad sales divided by ad spend. They carry the same information.
| ACOS | ROAS | Ad cost per $100 of ad sales |
|---|---|---|
| 10% | 10.0x | $10 |
| 20% | 5.0x | $20 |
| 25% | 4.0x | $25 |
| 33% | 3.0x | $33 |
| 50% | 2.0x | $50 |
What moves ACOS
ACOS is cost per click divided by the sales each click produces. So it has exactly three levers:
- Cost per click. Your bid and the competition for the placement. Lower bids lower ACOS, until you lose the clicks that convert.
- Conversion rate. The share of clicks that order. Price, images, title and the match between the search and your product all move it.
- Order value. A higher price or a bundle raises the sales each order brings, which lowers ACOS at the same click cost.
A term with spend and no sales has no ACOS at all: it is spend divided by zero. Those are the first terms to find each week, and the negative keywords guide covers what to do with them.
Is your ACOS good?
Only your margin can say. An ACOS under your break-even ACOS, your profit margin before ads, makes money on every ad sale; over it, every ad sale loses money. A 35% ACOS is excellent on a 50% margin and a loss on a 25% one. What is a good ACOS?
Questions
- What does ACOS stand for?
- Advertising Cost of Sales. It is ad spend divided by the sales attributed to those ads, as a percentage.
- Is a lower ACOS always better?
- Lower ACOS means cheaper ad sales, but a very low ACOS can mean bids too timid to win the clicks that would sell. The goal is the most profit, which is usually an ACOS under break-even, not the lowest ACOS possible.
- What is the difference between ACOS and TACOS?
- ACOS divides ad spend by ad sales. TACOS divides the same spend by all sales, with or without an ad, so it shows how much of the whole business your ads cost.