Account health, ads, inventory and fulfilment · The two numbers that describe ad efficiency
ACoS and TACoS
ACoS measures the ad lane. TACoS measures the business. Mixing them up produces the wrong budget decision.
Key facts
| ACoS | Ad spend divided by ad-attributed revenue |
|---|---|
| TACoS | Ad spend divided by total revenue, including organic sales |
| Break-even ACoS | The contribution margin before ad spend, expressed as a share of revenue |
| Launch pattern | ACoS is often high and TACoS is also high because organic is small |
| Maturity pattern | ACoS can stay stable while TACoS falls as organic revenue grows |
| Official source | Amazon Ads console and the business report for total ordered product sales |
ACoS is a lane, TACoS is the business
ACoS answers one question: for every dollar of ad-attributed sales, how much did the ad cost? It is useful for bid and keyword decisions inside the ad console. It says nothing about whether the product is profitable after organic sales and fixed costs.
TACoS divides the same spend by total revenue. A product with strong organic demand can carry a high ACoS and still have a healthy TACoS. A launch product can have a reasonable ACoS and a frightening TACoS because almost all sales are paid.
Break-even is your own margin
There is no universal good ACoS. The break-even ACoS is the contribution margin before advertising: price minus product cost, fulfilment, referral fees, returns and expected overhead, divided by price. Spend above that line buys growth at a loss; spend below it funds profit.
Set two targets: a launch TACoS ceiling you are willing to fund for a defined window, and a mature TACoS target that supports the business. Review weekly, but judge the trend over four weeks, not two days.
Frequently asked questions
Which number should I optimize?
Use ACoS inside the ad console for bids and keywords, and TACoS for budget decisions at the business level.
Is a lower ACoS always better?
No. Cutting spend below the level that sustains impressions can reduce total profit. The right target is the one that maximizes contribution over the planning window.
How does launch change the target?
During launch, paid sales are a larger share of total revenue, so TACoS is naturally high. Set a time-boxed ceiling and a review date rather than comparing launch TACoS to a mature product.
Does TACoS include organic sales?
Yes. That is the point: it measures ad spend against the whole business, which is why it falls when organic demand grows.
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