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Metrics
ACOS
Ad spend divided by ad-attributed revenue, expressed as a percentage. The inverse of ROAS. A 25% ACOS means you spend $0.25 in ads for every $1 in revenue (equivalent to 4x ROAS). Commonly used in Amazon advertising but applicable across channels. ACOS below your contribution margin means advertising is profitable; above it means you're losing money on ad-driven sales. Target ACOS should be set relative to margin, not arbitrary benchmarks.
Why it matters
It is ROAS inverted, common in marketplace reporting, and mixing the two in one conversation reliably produces a decision made on the wrong direction.
In practice
Convert to whichever your team uses and stay there. ACOS of 25 percent is ROAS of 4x; write one of them down and stop translating.
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