ACoS vs TACoS
ACoS and TACoS are two metrics that answer different questions. Getting them confused leads to optimising the wrong thing. This article names the difference, shows when each is the right call, and explains the specific trap (low ACoS, high TACoS) every growing brand hits eventually.
The definitions
ACoS (Advertising Cost of Sale) = ad spend ÷ sales generated by ads. Only the revenue that can be directly attributed to an ad click counts. Measures the efficiency of individual campaigns.
TACoS (Total Advertising Cost of Sale) = ad spend ÷ TOTAL product revenue (ads + organic). Measures how much advertising eats into your total business.
When to use ACoS
Use ACoS for campaign-level optimisation decisions. "Should I pause this keyword? Is this ad group profitable?" are ACoS questions. Your target ACoS depends on your product margin — a 30 % ACoS is healthy if your margin is 40 %, disastrous if your margin is 25 %.
When to use TACoS
Use TACoS for strategic decisions. "Is advertising growing the business or eating into it? Should we spend more overall?" are TACoS questions. A healthy TACoS typically sits between 10 % and 20 % for mature Amazon brands, though this varies by category.
The classic trap: low ACoS, high TACoS
You push your ACoS down aggressively. The number looks great. But your TACoS creeps up — meaning advertising is consuming more of your total revenue, not less. What's happening?
Usually: brand cannibalisation. Customers who would have found you organically are clicking your ads instead. Your ad ACoS looks low (those customers convert at high rate), but the ad sales are replacing organic sales that cost you nothing.
Fix: reduce spend on Branded-term campaigns. Let those customers find you organically.
Where Sellerwerk shows each
ACoS is on every campaign, ad group, and keyword view. TACoS lives in the Profitability dashboard (Pro tier and above), where we subtract Amazon fees, shipping, and returns from revenue so you see margin-adjusted numbers rather than raw revenue.
Related
Automation basics covers rules that optimise on ACoS or TACoS. Dashboard tour walks through which number lives where.