ACOS (Advertising Cost of Sales): Strategy & Definition

What is ACOS on Amazon? – Definition & Relevance

The Advertising Cost of Sales (ACOS) represents the percentage ratio between advertising spend and the advertising revenue directly generated by it. It is one of the most important metrics in Amazon Advertisingfor evaluating the profitability of individual campaigns.

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The mathematical basis (copyable):

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ACOS = Advertising Spend / Advertising Revenue * 100

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(Example: €200 in advertising costs / €1,000 in revenue = 20% ACOS)

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Why we prioritize ACOS strategically:

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  • Transparency of the cost ratio: It shows us at a glance what percentage of revenue is spent on generating sales.
  • Profitability Check: By comparing your profit margin (break-even ACOS), we determine the scope for aggressive scaling.
  • Synergy with ROAS: While ACOS focuses on costs, when combined with ROAS , it provides a complete picture of advertising effectiveness.

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Our Approach: Strategic Management of the Cost Ratio

In our day-to-day operations, we never view ACOS in isolation. Drawing on over 10 years of marketplace management experience, we know that a low ACOS should not always be the goal if it results in the loss of valuable market share.

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How we work with ACOS to help you succeed:

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  • Defining Target Metrics by Phase: We distinguish between launch phases, during which we focus on visibility in Amazon SEO , and performance phases, during which we optimize for maximum profitability.
  • Granular keyword optimization: We identify cost drivers that aren’t relevant to conversions and reallocate budgets to segments that strengthen your market authority.
  • Comprehensive Account Health: We analyze the impact of advertising costs on total account revenue (Total ACOS) to ensure that your growth is sustainably supported by operational excellence.

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Other relevant terms

Advertising
CPM (cost per thousand impressions)
The metric used in programmatic advertising (DSP) that indicates the cost per 1,000 ad impressions.
Advertising
Negative Keyword Optimization
The process of excluding irrelevant search terms from advertising campaigns to avoid unnecessary costs from clicks with no intention to purchase.
Advertising
CPC (Cost-per-Click)
The amount an advertiser pays Amazon for each individual click on an ad.
Advertising
Dayparting (Time-Based Bidding)
Strategically adjusting ad bids based on specific times of day or days of the week when the conversion rate is highest.

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