What is TACoS? TACoS Review, Features

TACoS stands for Total Advertising Cost of Sales, which measures the ratio of advertising expenditure to total revenue. TACoS can help Amazon sellers gain a more comprehensive understanding of how advertising expenditure affects overall sales and better insight into a brand’s long-term growth.

About TACoS

A low TACoS means that the product is generating strong sales growth when advertised. Conversely, a high TACoS means that the product advertising is not returning strong revenue, which likely means that the ads are underperforming and it is time to review and test the campaign using new keywords, bids, products, or a combination of all three.

Indicator significance

1. TACoS growth: This indicates that sellers are investing more in advertising spending, but organic sales are not growing at the same rate.

2. TACoS decreases or remains flat: This indicates that the product in the advertisement is generating strong or stable sales. It also indicates that organic sales are improving and the seller's brand awareness is increasing.

3. Both TACoS and ACoS are growing: Although not ideal, it makes sense in certain situations. If a seller launches a new product, the main goal is to increase sales. Over time, as the brand or product organic search improves, TACoS will begin to decrease.

4. ACoS is decreasing while TACoS is increasing: While this rarely happens, it is a sign that a seller’s organic sales are actually decreasing or becoming a smaller part of their total revenue. Ultimately, this will deviate from the brand’s long-term goal of increasing organic sales and reducing reliance on paid advertising as the sole driver of sales.

The difference between TACoS and ACoS

1. ACoS

ACoS is a measurement between ad spend and the revenue it generates. Divide your total ad spend by the total value of the revenue it generates, then multiply by 100 to get a percentage, which is your ACoS value.

2. TACoS

TACoS is calculated similarly to ACoS, but TACoS takes into account overall revenue rather than just revenue from advertising.