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THE TECHNICAL LANGUAGE OF DIGITAL B2B INFRASTRUCTURE

METRIC
PERFORMANCE ADVERTISING

Advertising Cost of Sales (ACoS)

Amazon Ads metric that expresses advertising spend as a percentage of the sales attributed to those ads.


BUSINESS RELEVANCE

ACoS tells sellers how much of each attributed sales dollar goes to advertising, so it guides bids, budgets and the decision to keep or pause keywords against each product's margin.


IMPLEMENTATION EXAMPLE

A Sponsored Products campaign spends $1,200 and records $4,800 in attributed sales, so ACoS = $1,200 ÷ $4,800 × 100 = 25%. With a 30% pre-ad margin, ad-driven sales stay profitable, so the seller raises bids on top keywords.


LIMITATIONS

ACoS only counts sales Amazon attributes to ads within its attribution window, so it ignores organic sales lift, repeat purchases and brand effects. A very low ACoS can also mean the campaign is underspending on growth.


TECHNICAL EXPLANATION

ACoS is calculated as ad spend divided by attributed ad sales, multiplied by 100. It is the inverse of Return on Ad Spend (ROAS): an ACoS of 25% equals a ROAS of 4. Sellers compare it with break-even ACoS, which equals the product's profit margin before advertising; below that level each attributed sale is profitable. Many teams also track total ACoS (TACoS), dividing ad spend by all sales, organic and paid.


Secondary Topics

Revenue Operations

Sources

Amazon Ads — What is ACOS? Advertising cost of sales — https://advertising.amazon.com/library/guides/acos-advertising-cost-of-sales; Pattern — Amazon ACoS: Advertising Cost of Sales — https://pattern.com/blog/amazon-acos-advertising-cost-of-sales/