What Is the Difference Between ACOS and TACOS on Amazon?
ACOS tells you how your ads performed. TACOS tells you whether advertising is actually building your Amazon business. Here is why the difference matters and which one to optimize for.
ACOS is Advertising Cost of Sale. It measures how much you spend on ads as a percentage of the revenue those ads generated. If you spend $20 on Amazon Sponsored Products and generate $100 in attributed sales, your ACOS is 20%.
TACOS is Total Advertising Cost of Sale. It measures your ad spend as a percentage of your total revenue, not just ad-attributed revenue. If you spend $20 on ads, generate $100 in ad-attributed sales, and $50 in organic sales, your TACOS is 13%.
ACOS only looks at sales that came directly from ads. TACOS looks at your entire business. TACOS gives you a more accurate picture of how advertising affects your overall profitability.
A high ACOS with a low TACOS means your ads are driving organic sales. Someone clicks your Sponsored Product ad, views your listing, does not buy immediately, then comes back later and buys organically. Amazon attributes the sale to organic, but the ad created the initial awareness.
Focusing only on ACOS can lead to bad decisions. You might cut ad spend because your ACOS is 30%, not realizing that those ads are driving organic rank and total sales volume. TACOS shows the real cost of customer acquisition.
Most Amazon sellers should aim for a TACOS between 8% and 15% depending on margins. If your TACOS is above 20%, you are spending too much on ads relative to total revenue. If your TACOS is below 5%, you might be leaving growth on the table.
Use ACOS to evaluate individual campaigns. Use TACOS to evaluate your overall advertising strategy. One measures efficiency. The other measures profitability.