Enter the ad spend and the ad revenue into the Calculator. The calculator will evaluate the Advertising Cost of Sales. 

Advertising Cost of Sales Formula

ACOS = AS / AR * 100

Variables:

  • ACOS is the Advertising Cost of Sales (%)
  • AS ($) is the ad spend
  • AR ($) is the ad revenue

To calculate Advertising Cost of Sales, divide the ad spend by the ad revenue, then multiply by 100.

How to Calculate Advertising Cost of Sales?

The following steps outline how to calculate the Advertising Cost of Sales.

  1. First, determine the ad spend. 
  2. Next, determine the ad revenue. 
  3. Next, gather the formula from above = ACOS = AS / AR * 100.
  4. Finally, calculate the Advertising Cost of Sales.
  5. After inserting the variables and calculating the result, check your answer with the calculator above.

Example Problem : 

Use the following variables as an example problem to test your knowledge.

ad spend = 3000

ad revenue = 5000

FAQ – Advertising Cost of Sales

What is a good Advertising Cost of Sales (ACOS) percentage?

A good ACOS percentage varies by industry and campaign objectives. Generally, a lower ACOS indicates a more efficient advertising campaign, but the target ACOS should align with the profit margins and overall marketing strategy of the business.

How can I improve my Advertising Cost of Sales?

Improving ACOS can be achieved by optimizing ad targeting, enhancing the quality of ad creatives, refining keywords, and improving the product listing’s conversion rate. Regularly reviewing and adjusting campaigns based on performance data is key to maintaining an efficient ACOS.

Is a lower ACOS always better?

Not necessarily. While a lower ACOS indicates higher efficiency in advertising spending relative to revenue, it’s important to balance ACOS with overall business goals, such as market share growth or brand visibility, which might justify higher advertising expenditures.

Can ACOS be applied to all types of advertising?

ACOS is primarily used in the context of digital advertising, especially for e-commerce and online businesses. However, the concept of comparing advertising spend against revenue can be applied broadly across different advertising mediums to gauge efficiency.