What is ACoS?
ACoS (Advertising Cost of Sales)is the percentage of ad-attributed revenue you spend on advertising. It's calculated as(Ad Spend ÷ Ad Revenue) × 100. An ACoS of 25% means you spent $0.25 in ads for every $1.00 of attributed sales. Lower ACoS generally indicates more efficient ad spend.
What is ROAS?
ROAS (Return on Ad Spend)is the inverse of ACoS — the dollar amount of revenue earned for every dollar spent on advertising. It's calculated asAd Revenue ÷ Ad Spend. A ROAS of 4 means you earned $4.00 in attributed sales for every $1.00 spent on ads. Higher ROAS generally indicates more profitable advertising.
ACoS vs ROAS: Which should you track?
ACoS and ROAS describe the same relationship from opposite directions, so the “right” choice depends on your reporting habits. Amazon advertisers traditionally use ACoS because it pairs naturally with profit margin (if your margin is 30%, your break-even ACoS is 30%). Google and Meta advertisers tend to use ROAS because it scales upward with success and is easier to compare across channels. Use whichever your team understands best — but always benchmark against your target margin so you know whether your ads are actually profitable.
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