Glossary
TACoS
Total Advertising Cost of Sales: ad spend as a share of all sales, organic and paid.
FormulaTACoS = ad spend ÷ total sales × 100
Definition
Where ACoS measures the efficiency of ads in isolation, TACoS measures how dependent the whole business is on advertising. Two accounts with the same 25% ACoS can have TACoS of 5% or 17% depending on how much organic volume the ads generate alongside the attributed sales.
The trend is more important than the level. Falling TACoS at stable spend means organic sales are growing faster than paid: the advertising is building rank. Rising TACoS at flat total sales means paid is replacing sales you used to get for free, usually a sign of a listing, pricing or review problem.
Typical ranges: 20 to 40% during a launch, 10 to 20% in growth, 5 to 12% for mature brands. The warning sign is a rising TACoS with flat total sales.
How we use it
TACoS trend over twelve months is the first line of every monthly report we send, because it is the number the owner should steer by.
Get my free auditIs a low TACoS always good?
Not if sales are flat. A very low TACoS can mean under-investment: the brand could grow profitably with more advertising. Judge TACoS together with the sales trend.
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