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You’re looking at ACOS the wrong way | Upside #38
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Is Advertising Cost of Sales (ACOS) truly the metric you should be losing sleep over, or is there a tastier option out there - TACOS (Total Advertising Cost of Sales)?
In this episode, Ali & Zamir unravel the complex world of advertising metrics by pitting ACOS against TACOS, challenging the conventional wisdom that lower ACOS is always better. Hear how TACOS offers a more comprehensive view of advertising effectiveness, and how these metrics can influence strategic decisions.
Through the lens of branded and competitor campaigns, we explore how ACOS expectations can differ dramatically, and why embracing TACOS could be a game-changer for your brand's growth.
We break down the key distinctions between ACOS and TACOS, asking why ACOS is often misunderstood and misapplied as a macro-metric. Learn how it should be used tactically, especially at the keyword level, to enhance your advertising strategy.
Whether you're poaching sales from competitors or optimising for high conversion rates in a branded campaign, this episode is packed with actionable insights to help you navigate the nuanced landscape of advertising metrics.
Key Takeaways:
ACOS vs TACOS: ACOS measures advertising spend relative to attributed revenue, while TACOS measures advertising spend relative to total revenue (organic + paid).
ACOS is Tactical: Use ACOS for evaluating specific campaigns or keywords, not for broad strategic decisions.
TACOS is Strategic: TACOS gives a better overview of total business performance and efficiency by factoring in all revenue.
Different ACOS Targets: Low ACOS (e.g., 10%) suits branded campaigns, while higher ACOS (30-40%) is acceptable for competitor or growth-driven campaigns.
Higher ACOS Aids Growth: High ACOS can be justified in competitive markets to drive growth, with the expectation of improvement over time.
Budget Balance Matters: ACOS depends on how the budget is allocated across branded, generic, and competitor campaigns—optimize this balance for profitability and growth.
To access more insights on boosting sales, minimising costs, and maximising profitability across online marketplaces, visit https://thiswayup.online/resources
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