ROAS and ACOS explained
ROAS (return on ad spend) shows how much revenue each dollar of advertising brings in. ACOS (advertising cost of sales) shows the same relationship the other way round, as ad spend divided by the revenue it produced. Amazon reports ACOS. Google, Meta and Shopify tools usually report ROAS. They are two views of one number.
Worked example
You spend $2,000 on ads and they bring in $8,000 of revenue from 100 orders and 2,000 clicks. ROAS is 4x and ACOS is 25%. Each order costs $20 in ads, each click costs $1.00, and 5% of clicks become orders. If your total sales were $20,000 that month, TACOS is 10%.
Is my ROAS good?
There is no ROAS that is good for every store, because it depends on your margin. A 4x ROAS can lose money on a 20% margin and make money on a 60% margin. To see where your own line is, use the break-even ROAS and ACOS calculator, which works it out from your price, costs and fees.
Frequently asked questions
What is the difference between ROAS and ACOS?
They measure the same thing. ROAS is revenue divided by ad spend, and ACOS is ad spend divided by revenue. A 4x ROAS is the same as a 25% ACOS.
How do I convert ROAS to ACOS?
Divide 100 by the ROAS. A ROAS of 5 equals an ACOS of 20%. To go the other way, divide 100 by the ACOS percentage.
What is TACOS?
TACOS is ad spend as a share of your total sales, including sales that did not come from ads. It shows how much your advertising costs against the whole business.
Does ROAS include profit?
No. ROAS only compares revenue with ad spend. Profit depends on your product cost, fees and other expenses, which the break-even ROAS calculator takes into account.