Amazon advertising has its own language. ACoS, TACoS, ROAS, CVR, CPC, CTR — the acronyms pile up fast. Here is what each metric actually means, why it matters, and which ones you should actually optimize for.
ACoS (Advertising Cost of Sales)
ACoS = Ad Spend / Ad Revenue x 100. If you spend $100 and generate $400 in ad-attributed sales, your ACoS is 25%. Lower is generally better, but the right target depends on your margins. A product with 40% margin can sustain 30% ACoS profitably. A product with 15% margin cannot.
TACoS (Total Advertising Cost of Sales)
TACoS = Ad Spend / Total Revenue x 100. This is the more important metric because it accounts for organic sales too. A TACoS of 10% means advertising costs represent 10% of your total revenue. Declining TACoS over time means your organic sales are growing relative to ad spend — the ultimate sign of a healthy advertising program.
ROAS (Return on Ad Spend)
ROAS = Ad Revenue / Ad Spend. It is the inverse of ACoS. 25% ACoS = 4x ROAS. Some platforms report ROAS, others ACoS — they tell you the same thing in different formats.
Metrics That Mislead
Impressions and clicks are vanity metrics — high impressions with low conversions means you are showing ads to the wrong people. CTR matters only as a diagnostic: very low CTR suggests your product image or price is uncompetitive. The only metrics that matter for profitability are ACoS (or ROAS), TACoS, and absolute profit dollars.