the Difference between ACOS, TACOS and ROAS

This article will clarify the differences between terms commonly associated with Sponsored Products and advertising on Amazon’s platform.

ACoS

The term “Advertising Cost of Sales” on Amazon is ACoS. This indicator shows you how much money you are making from PPC advertising compared to the money you are spending on them.

Ad Spend divided by Sales From Ads is the equation to solve for ACoS. For instance, your ACoS on that product would be $100 (Ad Spend) divided by $400 (Sales From Ads) = 25% if you paid $100 on PPC ads for a product and received $400 in sales as a result of those PPC ads.

Generally speaking, you want your ACoS to be as low as possible. Lower ACoS ratings indicate better value and a higher ROI (Return on Investment) on your PPC advertising expenditures.

TACoS

Total Advertising Cost of Sales, or TACoS, is a term used on Amazon. The phrase “total,” which accounts for all sales of a product rather than simply those brought on by PPC adverts, is the main distinction between this and ACoS, despite the fact that at first glance they may appear to be comparable.

Divided by “Total Sales,” “Ad Spend” is the formula that results in TACoS. For instance, your TACoS on this SKU would be $50 (Ad Spend) divided by $500 (Total Sales) = 10% if you spent $50 on PPC advertisements for a product and had $500 in total sales for that product (taking into account sales produced from that PPC ads as well as from other channels such as organic sales).

RoAS

In the e-commerce sector, ROAS is a well-liked measure that functions quite similarly to ROI. It stands for Return On Ad Spend and details the amount of profit your marketing campaign is generating.

ROAS is calculated by dividing “Ad Sales” by “Ad Spend.” Your return on investment (ROAS) would be equal to $500 (ad sales) divided by $100 (ad spend) or 80% if you sold $500 worth of goods and spent $100 on PPC adverts.