What is Amazon ACoS?
Amazon advertising cost of sales (ACOS) is a metric used to measure Amazon pay-per-click (PPC) advertising campaigns. It compares the amount spent on PPC campaigns to the amount earned, and it helps determine if your brand generated campaigns that were cost-efficient. Amazon ACOS helps measure the performance of Sponsored Products ads on Amazon.
Although it may be tempting to want high sales volume and a low Amazon ACOS, there are variables that make a difference and reasons why that shouldn’t necessarily be your only goal. In this guide we’ll explain what Amazon ACOS is, why it’s important, and how it can be an integral part in advertising campaigns for Amazon sellers.
Amazon ACOS is calculated by dividing ad spend by ad revenue, then converting it to a percentage. For example, if you spent $50 on an ad campaign and earned $100 from it, your Amazon ACOS would be 50%.
ACOS = (ad spend ÷ ad revenue) x 100
ROAS = ad revenue ÷ ad spend
Return on ad spend (ROAS) is the inverse of Amazon ACOS: it is calculated by dividing ad revenue by ad spend. In the example above, the ROAS would be 2.
The ROAS tells you how much you could anticipate earning from an ad campaign, and Amazon ACOS tells you the percentage of increase. Both are measuring the same metrics, but the two calculations present the information in slightly different formats. It can be useful to look at both, though, to get a comprehensive view of how your ad campaigns are performing.
- Guide to PPC Campaigns on Amazon
- the Difference between ACOS, TACOS and ROAS
- Tracking Your Ads To Sales Ratio on Amazon
- Increasing Amazon products organic ranking
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