Advertising cost of sales (ACoS) is the percentage of direct sales you made from Sponsored Products ads, or the overall brand sales you made from Sponsored Brands that resulted from your advertising campaign. This is calculated by dividing total ad spend by total sales from advertising.
ACoS = total ad spend ÷ total ad sales x 100
For example, if you spent $2 on advertising and those ads resulted in sales of $20, your ACoS would be 10%.
ACoS helps you measure the effectiveness of your campaigns relative to your advertising spend. A lower ACoS means you’re spending a lower percentage of sales on advertising.
For Sponsored Products campaigns, your total sales consist of product sales generated within one week of clicks on your ads. This total includes both sales of the advertised SKU as well as sales of the other SKUs in your inventory. For example, if a click on your ad for a blue shirt generates a sale for one of your red shirts, this is included in total sales.
For Sponsored Brands, total sales consist of the product sales generated by ad clicks in two weeks. This total includes sales of the advertised products as well as sales of other products within the same brand that resulted from clicks on your ads, regardless of whether they were or sold by you or by others. Learn more about brand sales
For example, let’s say you have a brand that sells athletic equipment. You may find that your Sponsored Brand for your new running shoe collection has also generated sales for your socks and workout clothing that was sold by other advertisers.
To minimize your spend on advertising, you’ll want to lower your ACoS. If your goal is to increase exposure of a new or existing SKU, you might be okay with a higher ACoS for a set period of time.
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