Introduction
Advertising on Amazon has become essential. With competition fierce and organic visibility harder to achieve, running ads is no longer optional. Most sellers know about ACOS (Advertising Cost of Sales), but too few understand TACoS (Total Advertising Cost of Sales).
Here’s the truth: ACOS shows ad efficiency. TACoS shows business health.
If you want to scale sustainably, TACoS is the metric you can’t ignore.
What is ACOS?
ACOS = (Ad Spend ÷ Ad Sales) × 100
Example:
- Spend $500 on ads
- Generate $2,000 in ad-attributed sales
- ACOS = 25%
ACOS helps you measure how efficiently ads generate sales—but it only looks at ad-attributed revenue.
What is TACoS?
TACoS = (Ad Spend ÷ Total Sales) × 100
Example:
- Spend $500 on ads
- Generate $2,000 in ad sales + $3,000 in organic sales = $5,000 total
- TACoS = 10%
TACoS shows how ad spend impacts your entire business, including organic growth.
Why TACoS Matters More Than ACOS
1. TACoS Reflects Organic Growth
If your ads boost organic rankings and long-term sales, TACoS will shrink even if ACOS stays steady.
2. ACOS Can Be Misleading
A low ACOS might look good—but if ads aren’t contributing to total sales growth, you’re not building a sustainable business.
3. TACoS Aligns with Profitability
At the end of the day, sellers care about net profit, not just campaign efficiency. TACoS reflects the impact of ads on total revenue.
What Healthy TACoS Trends Look Like
- Shrinking TACoS → Ads are fueling organic growth.
- Stable TACoS → Ads are maintaining your growth baseline.
- Rising TACoS → Ads are carrying too much weight, organic growth is weak.
Strategies to Lower TACoS
- Target Keywords for Organic Lift
Focus on terms you want to rank for long-term, not just short-term sales. - Optimize Listings for Conversion
Ads drive traffic—but optimized listings turn traffic into sales. - Invest in Reviews & Ratings
Reviews improve conversion rates, lowering dependency on ads. - Use Brand-Building Ads
Sponsored Brands & DSP can drive awareness that boosts organic visibility. - Measure Beyond Campaigns
Track TACoS monthly to evaluate how ads contribute to overall business growth.
Real-World Example
A supplement brand was spending heavily on ads and celebrating their 20% ACOS. But TACoS told a different story—it had risen to 18%, showing ads weren’t driving organic lift.
After refocusing ad spend on long-tail keywords and improving listing content, their TACoS dropped to 11% while sales grew 32%.
The Future of Amazon Advertising Metrics
Expect more sellers to adopt TACoS as the gold standard for measuring success. With rising ad costs and increased competition, focusing only on ACOS is short-sighted.
Future-forward sellers will measure:
- TACoS for overall health
- ACOS for efficiency
- Blended ROAS for profitability
Conclusion
Amazon sellers who obsess over ACOS miss the bigger picture.
TACoS is the true measure of whether ads are building your business—or just eating profit.
By focusing on TACoS, sellers gain clarity on whether their advertising strategy is fueling long-term organic growth, sustainable rankings, and stronger profitability.
The takeaway? Track both metrics, but let TACoS guide your growth decisions.
👉 Want help lowering your TACoS while scaling? Our team supports brands like 5.11 Tactical and simplehuman with ad strategies that drive long-term profitability.
