What is ACoS and how is it calculated?
Amazon ACoS (Advertising Cost of Sale) measures the efficiency of your advertising campaign. It is the ratio of ad spend to ad revenue (in %). In other words, ACoS shows how much of every dollar that was earned with advertising was spent on the ad campaign. You can calculate ACoS using this formula:
ACoS = Ad Spend ÷ Ad Revenue * 100
A campaign has generated $254 of advertising sales. The ads during this campaign cost $63.
→ ACoS = 63 / 254 * 100 = 25%. I.e. for every dollar made, 25 cents have been spent.
Your sponsored product has had a total of $2 costs for all of its clicks, and made a total of $10 in sales.
→ ACoS = 2 / 10 = 20%. I.e. for every dollar made, 20 cents have been spent.
The following articles can help obtain a better understanding as to why the ACOS is a central metric to measure the performance of your Sponsored Products, as well as how you can define what a "good" ACOS is: