Amazon Advertising Metrics: ACoS, TACoS, and RoAS

Discover the power of Amazon advertising metrics. Learn how Return on Advertising Spend (RoAS), ACoS, and TACoS help optimize your campaigns and maximize profitability. Track these metrics with Junglytics, the customizable data analytics platform for Amazon sellers.

Isiah Kurz

January 19, 2024

Navigating the world of Amazon advertising metrics? ACoS, TACoS, RoAS – these cryptic acronyms swirl around us, promising insights into campaign performance but often leaving us more confused than informed. But today, we’ll crack the code—exploring each metric and revealing which one reigns supreme for different Amazon advertising goals.

ACoS: The Efficiency Enforcer

Think of ACoS (Advertising Cost of Sales) as your ad spend's fitness tracker. It shows you, as a percentage, how much of every dollar spent on ads converts into sales.

Advertising Cost of Sales (ACoS) by product line, presented as a line graph.

ACoS is great for measuring individual campaign efficiency. It helps you identify money-hungry duds and opportunities for optimizing budget allocation. A high ACoS might mean you’re spending too much on advertising. A low ACoS shows you’re moving in the right direction.

Think of it like this: An ACoS of 20% means you get $5 in revenue for every dollar spent on ads. But let’s say you start a new campaign—and it has an ACoS of 20%. You analyze keywords and adjust bids, dropping ACoS to 10%. Result? Increased profitability and more room for reinvestment in promising campaigns.

TACoS: The Big-Picture Boss

While ACoS focuses on individual campaigns, TACoS (Total Advertising Cost of Sales) takes a bird's-eye view. It reveals the impact of ALL your ad spend on total sales, including organic sales potentially influenced by those ads. Think of TACoS as measuring the overall health of your advertising kingdom.

Total Advertising Cost of Sales by product line.

Here’s an example: Your average ACoS across all campaigns is 15%, but TACoS is only 5%. This indicates your ads are driving organic sales alongside direct conversions, boosting overall profitability.

TACoS is helpful because smart sellers can use this metric to justify riskier advertising investments in one area while ensuring that their overall advertising is within budget.

RoAS: The King of Ad ROI

RoAS (Return on Advertising Spend) is the ultimate profit-o-meter. It tells you exactly how much revenue you get for every dollar invested in advertising. Imagine RoAS as your royal advisor, whispering "spend here, reap there" and guiding you towards maximum return.

A high RoAS is ideal for low-conversion products, while a low RoAS is useful for brand awareness or stock clearance.

For instance: Let’s say Campaign B delivers a 4:1 RoAS. This means for every dollar spent, you earn $4 in revenue. RoAS is especially helpful for comparing campaigns with different margins and setting target profitability levels. Top-performing Amazon sellers have an average RoAS of 5:1.

If you want to use this practically, you could measure RoAS for several product variations. Are advertisements for the blue version outperforming the turquoise? By exploring RoAS, you can determine which color is giving you the best returns—and therefore, can tell you where to pull budget to reinvest in the other color variation.

RoAS at a variation level is relevant for understanding if you’re advertising the right or wrong variation.

Choosing Your Focus Area

So, which metric is the ultimate champion? The truth is, there's no one-size-fits-all answer. It depends on your specific goals and stage of growth.

That being said, there are a few ways to use these metrics based on your maturity as an Amazon business:

Newbie Sellers: Focus on ACoS to optimize individual campaigns and learn the ropes.
Growing Sellers: Use TACoS to track advertising impact and ensure sustainable growth.
Established Sellers: Leverage RoAS to maximize profitability and compare campaign performance across diverse margins.

Remember to use all three metrics in conjunction for a holistic view.

Amazon Advertising Analytics: Data Analytics for Sellers

Of course, you’ll need an Amazon analytics tool to track these metrics and others effectively.

A Junglytics table showing ACoS, TACoS, and RoAS—all in one place.

Junglytics is the most customizable data analytics platform for Amazon sellers. With more than 40 metrics easily tracked by the business intelligence platform, Junglytics lets sellers know what’s most important to achieving their goals. That includes advertising metrics, like those listed above.

Junglytics Assistant makes it even easier for Amazon businesses and agencies to dig into their Amazon advertising KPIs. Junglytics users simply type or click a prompt and the AI-powered Amazon business intelligence tool returns an answer. Here’s a real example:

A look at Amazon advertising performance from Junglytics Assistant.

By tracking these metrics (and others) over time, Amazon sellers can identify trends, adjust strategies, and ultimately grow their businesses. It’s wise to resist fixating on benchmarks, so Junglytics lets users customize what they see to best match your specific goals.

So, grab your data and prepare to unleash the power of Amazon advertising metrics!

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And check out a live demo of our Amazon data analytics tool to see what Junglytics looks like in action.

ABOUT THE AUTHOR

Isiah Kurz

Isiah is an experienced content writer with more than a decade of experience in journalism, public relations, and marketing.

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