Amazon advertising has become more competitive and expensive. Measuring success solely through campaign returns like Advertising Cost of Sales (ACoS) no longer gives the full picture. That’s where Total Advertising Cost of Sale (TACoS) comes in.
Why the TACoS Metric Matters Now More Than Ever
Amazon advertising has become more competitive and expensive. Measuring success solely through campaign returns like Advertising Cost of Sales (ACoS) no longer gives the full picture. That’s where Total Advertising Cost of Sale (TACoS) comes in.
Unlike ACoS, which only looks at ad-attributed sales, TACoS calculates ad spend against your total sales (both paid and organic). This shows how your ads are influencing your overall revenue and long-term brand health. A lower TACoS over time generally means your ads are helping drive more organic sales, reducing your reliance on paid traffic.
TACoS vs ACoS vs ROAS: Knowing What to Watch
- TACoS takes a broader view by factoring in organic revenue alongside ad-attributed revenue, making it a better measure of whether your ads are contributing to sustainable growth rather than just short-term wins.
- ACoS evaluates campaign efficiency by comparing ad spend to ad-attributed sales. It’s useful for understanding how a specific campaign is performing, but it doesn’t capture the bigger picture.
- ROAS (Return on Ad Spend) measures revenue per ad dollar, again focusing solely on paid performance.
Why TACoS is the “Growth Meter”
- A low TACoS alongside a low ACoS means ads are efficient and are also driving organic sales, which is an ideal state.
- A low ACoS but high TACoS means campaigns look efficient but aren’t translating into overall brand growth.
- A high ACoS but low TACoS can mean ads are expensive but supporting strong organic sales, which may still be worth the spend in growth phases.
- A high ACoS and high TACoS mean you’re spending too much without seeing sustainable benefits, and adjustments are needed fast.
How to Calculate TACoS and What’s Considered “Good”
Formula: TACoS = (Total Ad Spend/Total Sales [Ad+Organic]) x 100
While every category is different, general benchmarks are:
- Below 10%: Excellent, strong organic presence
- 10% to 15%: Balanced and sustainable
- Above 20%: Over-reliance on ads
What matters most is the trend. Declining TACoS over time typically signals growing organic traction, while rising TACoS can indicate dependence on paid sales.
2 Ways to Lower TACoS Without Hurting Sales
1. Improve Ad Efficiency
- Refine keyword targeting to focus on high-converting terms and eliminate waste with negative keywords.
- Use bid adjustments and dynamic bidding to direct spend toward the most profitable placements.
- Test ad types, creatives, and messaging to find the highest-ROI combinations.
2. Increase Organic Sales
- Optimize product listings with keyword-rich titles, compelling bullet points, strong images, and A+ content to boost conversion and organic rank.
- Build social proof with reviews, using post-purchase strategies to encourage feedback.
- Drive external traffic through SEO, influencers, email campaigns, and social media to bring in non-Amazon shoppers who can still convert on Amazon
By boosting both ad performance and organic sales, you can lower TACoS sustainably, reducing reliance on paid traffic while keeping total revenue strong.
Why TACoS Is Essential for Small- to Mid-Size Brands
For smaller brands with tighter margins, TACoS is one of the most important health metrics. It prevents over-investment in ads that don’t contribute to long-term growth and helps prioritize sustainable strategies over quick wins.
TACoS also highlights the connection between operational health and marketing efficiency. If organic sales aren’t growing, the answer isn’t always to cut ad spend. Often, you should invest smarter in listings, reviews, and off-Amazon brand building.
A TACoS-Driven Action Plan
- Track both ACoS and TACoS consistently.
- Set a target TACoS range based on your category and growth goals.
- Continually optimize product listings for both SEO and conversions.
- Use ad spend strategically to drive keywords and products that can build organic rank.
- Review TACoS trends regularly, and adjust campaigns based on the relationship between paid and organic performance.
TACoS as Your Growth Compass
In the fast-paced world of Amazon advertising, the brands that win aren’t always the ones with the lowest ACoS; they’re the ones with a TACoS strategy that fuels long-term growth. TACoS tells you if your ad dollars are just buying short-term sales or building organic momentum.
For small- to mid-size brands, mastering TACoS means making every ad dollar work harder for the future of your brand. That’s how you improve ad efficiency without killing sales.
If you want to find the right balance between efficiency and growth, it’s time to start tracking TACoS as closely as you track your sales.
