Amazon advertising gives sellers tools to get more people to see their products and make sales.. Doing this well is not just about watching how much money is made. Sellers need to know numbers that show how advertising is working for their business.
Two of the most talked about numbers are ACOS and TACOS. They sound alike. They mean different things. Knowing the difference can help sellers make choices about how to run their Amazon ads.
What Is Amazon PPC ACOS
ACOS stands for Advertising Cost of Sales. It shows how much money is spent on ads compared to the sales that come directly from the ads.
The simple math is advertising money divided by sales from ads multiplied by one hundred.
For example if a seller spends one hundred dollars on ads and gets five hundred dollars in sales from those ads the ACOS is twenty percent.
ACOS is mostly useful for seeing how well individual ads, keywords, products or targeting methods are making sales that can be traced back to the ads.
A low ACOS can mean ads are making money but sellers should not think a low ACOS is always good. They also need to think about profit, product costs, fees, discounts and what they want to achieve.
What Is TACOS
TACOS stands for Total Advertising Cost of Sales. Unlike ACOS TACOS looks at all sales the business makes not the ones from ads.
Total sales can include both sales from ads and sales that happen without ads.
For example if a seller spends one hundred dollars on ads and makes one thousand dollars in sales the TACOS is ten percent.
This bigger picture helps sellers see how much their money depends on ads.
TACOS can also show when a product gets sales on its own as it becomes more well known. In that case ads may help the business grow even if not every sale comes from an ad.
The Main Difference Between ACOS and TACOS
The main difference is the type of sales used in the math.
ACOS looks at sales that come directly from ads. TACOS looks at all sales.
ACOS helps sellers see how well ads are working. TACOS helps sellers see how much ads cost compared to all the money the business makes.
This means a campaign can have an ACOS but still have a good TACOS if the product is getting a lot of sales on its own.
On the hand a campaign may have a good ACOS but the business might rely too much on paid traffic. Looking at both numbers gives sellers information before making choices.
Why Sellers Should Track Both Numbers
Looking at one number can give a wrong idea about how the business is doing.
ACOS can help find ads that are spending too much or not doing well. Sellers can use this to check bids, targeting, keywords, budgets and product pages.
TACOS can help sellers see if ads are taking up much of the total money coming in. It can also show changes in how paid and organic salesre connected.
Checking performance through Amazon Reports Management makes it easier to see how ad costs, sales trends, ad performance and total money change over time.
How ACOS and TACOS Work
ACOS and TACOS are not rivals. They ask questions.
ACOS asks how well ads are making sales that can be traced back to them.
TACOS asks how much ads cost compared to all the sales the business makes.
For example imagine a product makes five hundred dollars in sales from ads with one hundred dollars spent on ads. The ACOS is twenty percent.
If that same product makes one thousand dollars in sales the TACOS is ten percent.
The difference shows that some sales are happening without ads. Without looking at TACOS a seller might miss this part of the business.
What Can Make ACOS Change
Many things can affect ACOS. Changes in bids how competition there is for keywords how often people buy after seeing ads, product prices how good the product page is, customer interest and how ads are targeted can all change campaign results.
A sudden rise in ACOS may mean that ads are costing more or not making many sales as before.
Sellers should check why this is happening before making big changes. Lowering bids away may cut costs but could also make the ads less visible and fewer sales.
This is why it’s important to look at performance with business numbers.
What Can Make TACOS Change
TACOS can change when ad spending or total sales change.
If ad spending goes up but total sales don’t TACOS may go up. If total sales grow faster than ad spending TACOS may go down.
Organic sales are important when looking at TACOS. A product that is growing may start to make sales on its own changing how ads and sales are connected.
Amazon Reports Management helps with this by organizing performance data and helping sellers see when sales, ad spending and trends are changing.
How Sellers Can Use These Numbers to Make Better Choices
Sellers should start by knowing what they want to achieve with their ads. A new product may need ads to get noticed, collect sales and grow.
An older product may need a plan focused on keeping sales profitable and avoiding too much ad spending.
Of trying to hit a specific ACOS or TACOS for every product sellers should think about product profits how far along the product is in its life how much competition there is, pricing and what the business wants to achieve.
Checking these numbers regularly can also show if ads are helping organic sales grow or just making paid sales without helping the rest of the business.
The Importance of Good Reporting
choices come from clear information. Sellers need to look at ad results with sales data and other important business numbers.
Amazon Reports Management can help sellers organize reports and see trends that may not be clear from just looking at one campaign.
When sellers check ACOS, TACOS, total sales, ad spending, how well ads are working and organic sales regularly they get an idea of how ads are affecting their business.
Final Thoughts
ACOS and TACOS show parts of how Amazon ads are working. ACOS looks at how ads are making sales. TACOS looks at how ads cost compared to all the sales the business makes.
Neither number should be looked, at alone. Sellers can use ACOS to see how their ads are doing and TACOS to see how ads fit into all the money the business makes.
