ACoS in practice.
ACoS is useful for comparing individual campaigns – but dangerous as your only control metric. It ignores the organic revenue that good advertising also generates. Anyone who optimises purely for a low ACoS ends up switching off the very campaigns that carry the ranking. That's why we always also look at the TACoS.
We'll explain it to you over the phone – no jargon and no sales pressure.
Calculating and interpreting ACoS correctly.
The formula is simple: advertising costs divided by advertising-driven revenue, times 100. With £250 of ad spend and £1,000 of revenue from ads, the ACoS is 25%. The real work begins with the question of whether that figure is good.
For that you need your Break-Even-ACoS: the point at which an advertised order brings neither profit nor loss. It roughly matches your contribution margin after Amazon fees, production costs and shipping. If your margin is 30%, an ACoS of 30% is the break-even line.
Below it you make money on every advertised order, above it you're paying in – at least in the short term. During the launch phase, an ACoS above break-even is planned deliberately, because you're buying ranking and reviews, not just revenue.
Lowering ACoS – the effective levers.
Consistently exclude search terms without sales instead of cutting bids across the board.
Better images and a stronger listing lower the ACoS without changing a penny on the bid.
Separate auto and manual campaigns so that winners can be scaled up in a targeted way.
Top-of-search often converts better – bid higher there, lower on product pages.
Steer budget into the hours when your target audience actually buys.
A price that's too high destroys conversion – and drives up the ACoS, no matter how well the campaign is running.
Common mistakes.
ACoS as the only goal. Anyone who only pushes down the ACoS often switches off exactly the campaigns that carry the organic ranking.
Intervening too early. Campaigns need data. Decisions based on 30 clicks are a gamble.
Not knowing your break-even. Without knowing your own margin, any ACoS figure is meaningless.
Treating all products the same. New products, bestsellers and discontinued lines need completely different ACoS targets.
Frequently asked questions about ACoS.
What is a good ACoS?
Why is my ACoS suddenly rising?
ACoS or TACoS – which matters more?
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