Privy Glossary | ACoS (Advertising Cost of Sales)

Definition

ACoS is the ratio of advertising spend to revenue generated from ads, expressed as a percentage.

Detailed Explanation

Commonly used in Amazon and marketplace advertising, ACoS helps sellers understand ad efficiency. A lower ACoS means better profitability, while a higher ACoS may still be acceptable for brand growth strategies.

Formula:
Ad Spend ÷ Ad Revenue × 100

Why It Matters in eCommerce

Measures ad profitability

Helps optimize ad budgets

Balances growth vs. margin

Example: If you spend $200 on ads and generate $1,000 in sales, your ACoS is 20%.

Related Terms

ROAS, CAC, Paid Media