ACoS (Advertising Cost of Sales)
ACoS is the ratio of ad spend to revenue attributed to that spend, expressed as a percentage. Common in Amazon Ads and marketplace advertising as the primary profitability metric.
ACoS stands for Advertising Cost of Sales. It is calculated as (ad spend / attributed revenue) × 100. If you spent $100 on ads and those ads drove $400 in sales, ACoS is 25%.
ACoS is the inverse of ROAS. A 25% ACoS is the same as a 4× ROAS. Marketplace advertisers like Amazon sellers tend to talk in ACoS; paid-social and paid-search advertisers tend to talk in ROAS. They're measuring the same underlying relationship.
'Target ACoS' is the ACoS that leaves the brand profitable after cost of goods, fulfillment, and overhead. A 30% ACoS looks good until you realize cost of goods is 50% — then every sale at 30% ACoS loses money. Always calculate target ACoS from gross margin backwards.