ACOS measures ads against ad sales. TACOS measures the same spend against everything you sold. One tells you whether a campaign is efficient, the other tells you whether advertising is growing the business. Here is when to use each.
Strategy
ACOS vs TACOS comes down to what sits under the line. ACOS measures your ads against sales from ads. TACOS measures the same spend against your total sales, organic included. ACOS tells you whether a campaign is efficient. TACOS tells you whether advertising is actually growing your business, and if you only ever look at one, look at that one.
Our best managed account runs a total advertising cost of sale of 8.68%, while our lifetime ACOS across every account sits at 17.84%. Those two numbers describe different things, and the gap between them is where most of the useful information lives.
What is on this page
The two formulas, side by side
Both are simple percentages and the only thing that changes is the bottom half of the sum. ACOS counts only sales that came from a click on your ad. TACOS counts every sale, whether it came from an ad or from a shopper who found you organically.
Because total sales are always larger than ad sales, your TACOS is always the lower number. If they sit close together, almost all your sales are coming from advertising, which we come back to below.
What each one is good for
Think of ACOS as the metric for a campaign and TACOS as the metric for the business.
ACOS is your steering wheel. It tells you which keywords, campaigns and products are pulling their weight and where you are overpaying. You optimise with it: raise bids where it is efficient, cut where it is not. If you are unsure what a healthy figure looks like, start with what is a good ACOS on Amazon.
TACOS is your dashboard warning light. It answers a bigger question: is the advertising adding sales, or is it slowly replacing organic ones you would have had anyway? A campaign can look excellent on ACOS while quietly cannibalising your own organic traffic, and only the total figure will show it.
Why the gap between them matters
This is the shape of a product where the launch worked. ACOS barely moves, because the campaigns are being run to the same standard throughout. TACOS falls away from it, because organic sales are growing while ad spend holds steady. The widening gap is the return on everything you spent in the first three months.
The reverse shape is the one to worry about. If the two lines are converging, your organic share is shrinking and advertising is filling the hole. Total sales might look fine for months while that happens, which is precisely why it goes unnoticed.
ACOS can look excellent while the business goes nowhere. That is not a flaw in the metric, it is a limit on what the metric was ever measuring.
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ACOS vs TACOS on one real month
Numbers make this concrete. A product spends £2,000 on advertising in a month and the ads are credited with £8,000 of sales, so ACOS is 25%. Total sales that month were £20,000, so total advertising cost of sale is 10%.
The £12,000 gap is the organic half of the business. It is the part ACOS cannot see, and it is usually the part that decides whether the product is worth having at all. Read only the 25% and you might cut spend to improve it. Read the 10% next to it and you can see that the advertising is holding up a much larger base.
Now run the month again with one change. Spend stays at £2,000, ad sales rise to £10,000 so ACOS improves to 20%, but total sales fall to £16,000 so the total figure worsens to 12.5%. The campaign got more efficient and the business got smaller, because the extra ad sales came out of organic ones. That is cannibalisation, and there is no way to see it from the campaign number alone.
The warning signs
The two numbers close together. Little organic underneath the paid sales. Normal during a launch, worrying on a product that has been selling for a year, because you are renting your entire revenue.
TACOS falling while total sales fall. The ratio improved because the business shrank. This is the most common false victory in Amazon reporting, and it usually follows a round of bid cutting.
TACOS rising while total sales stay flat. Something outside the campaigns changed: a competitor’s price, your review count, a coupon ending, or the featured offer slipping for part of the day. The diagnostic order is in Buy Box, stock and account health.
ACOS improving while TACOS worsens. The campaigns got tighter and the organic base got weaker. Usually means spend was cut on terms that were holding rank, which is the trap covered in cutting ACOS without losing rank.
Setting a target for each, without copying anybody
Two numbers, two different ways of choosing a target, and neither comes from a benchmark table.
The ACOS target comes from your break even point, which is your margin before advertising, adjusted for what the campaign is trying to do. A launch campaign correctly runs above it, a defensive campaign well below it. The full method is in what is a good ACOS on Amazon.
The total advertising cost of sale target comes from contribution, specifically what share of it you are prepared to reinvest in growth and for how long. A brand putting a third of contribution into growth for two quarters has a completely different number from one that needs every product profitable this month. Both are legitimate and the method is in there is no correct TACOS.
Write both down, with a review date. Targets set eighteen months ago against different costs are not targets any more, and the most common reason an account drifts is that nobody has revisited the numbers it is being steered by.
Which to use for which decision
| Decision | Use | Why |
|---|---|---|
| Raise or lower a keyword bid | ACOS | It is a campaign level question |
| Add a negative keyword | ACOS | Same, and it needs search term detail |
| Set next quarter’s budget | TACOS | It is a business level question |
| Judge whether a launch worked | TACOS | Organic taking over is the whole point |
| Decide whether to keep advertising a product | TACOS | ACOS cannot see the organic base |
| Compare two campaigns | ACOS | Total sales cannot be split between them |
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What a useful monthly report looks like
Four lines per product or per range, and nothing else at the top of the page. Total sales. Ad spend. ACOS. TACOS. Then the direction of travel on each against the previous month and the same month last year.
Read them as a set. Any single one can be made to look good by doing something harmful, and the combination makes that almost impossible to hide. If total sales are up, spend is flat and TACOS is falling, the account is working, whatever the individual campaign numbers say.
Deciding what your own target should be is a separate exercise, and it comes out of your contribution margin rather than an industry range. The method takes about fifteen minutes and it is in there is no correct TACOS.
Four ways these get misread
Reading TACOS weekly. Too noisy to act on. Monthly for decisions, quarterly for strategy.
Comparing account level TACOS between brands. Different margins, categories and stages. The comparison means nothing without those three.
Chasing a lower TACOS as the goal. The lowest possible TACOS is achieved by switching advertising off, which is rarely the plan.
Ignoring product level detail. Account level figures hide the product carrying everybody and the one bleeding quietly. Look at both numbers per product at least monthly.
Want reporting that shows both numbers next to total sales?
That is how we report every account we run, and you can have the format either way.
Frequently asked questions
ACOS divides ad spend by the sales the ads were credited with. TACOS divides the same spend by total sales, organic included. Because total sales are always larger, TACOS is always the lower number. ACOS judges a campaign, TACOS judges the business.
Optimise campaigns with ACOS and steer the business with TACOS. Keyword bids, negatives and placements are ACOS decisions. Budget level questions, launch decisions and whether advertising is actually adding sales are TACOS questions.
That almost all your sales are coming from advertising, with very little organic underneath. It is normal in a launch and a warning sign in an established product, because it means you are renting your whole revenue rather than owning any of it.
No. Total sales always include ad sales, so the denominator is always larger and TACOS is always the smaller figure. If your reporting shows otherwise, something is being counted twice or over different date ranges.
Usually yes, and that is the clearest sign a launch worked. Organic sales rise against steady ad spend, so the ratio falls without anybody cutting anything. If it is not falling by month four or five, the ranking work is not happening.
Both, with total sales next to them. Either one alone can be made to look good by doing something harmful, and the pair plus total sales makes that impossible to hide.
ACOS weekly for campaign decisions, TACOS monthly for business decisions. Reading TACOS weekly produces noise, and reacting to that noise is how accounts get destabilised.
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