I’m still surprised how many people search for what ACOS stands for in Amazon — it’s such a basic thing.
Many sellers ask the question: what does ACOS stand for in Amazon, and the answer is that it represents Advertising Cost of Sale, a key metric in Amazon PPC.
As an ACOS marketing term, it’s one of the few KPIs that ties ad spend directly to sales outcomes.
ACOS meaning Amazon refers to the percentage of sales that you are spending on advertising; for example, an ACOS of 20% means you’re spending $20 in ads for every $100 in sales generated from those ads.
First, let’s explain the classic method for calculating Amazon ACOS, and then we’ll explain the newest formula (developed in 2023) after.
In essence, the ACOS definition is simple. So, what does ACOS mean for your campaigns? ACOS, or Advertising Cost of Sales, is how much you spend on advertising per dollar of revenue you make.
This metric is a cornerstone of any ACOS Amazon PPC strategy, helping sellers evaluate their ad performance.
Knowing the ACOS definition helps you see if your ad dollars are really paying off or just burning a hole in your pocket. Whether you’re aiming for a good ACOS Amazon or exploring how to achieve a target ACOS Amazon, understanding this metric is crucial for success.
You can also think of ACOS as the ratio of ad spend in contrast with the target sales. It’s a fundamental concept in Amazon PPC, offering insight into how your advertising budget translates into revenue.
If you’re wondering how to calculate ACOS, the formula is simple: ACOS = Total Ad Spend ÷ Total Sales.
For those managing ACOS in Amazon PPC, this calculation is key to understanding the efficiency of your campaigns. Here’s the simple ACOS formula: