When it comes to online advertising, measuring performance is critical. You have to know what your ads are producing (and what they are costing) in order to make strategic decisions with budgets, bids, optimizations and more.
This is where metrics such as Return On Ad Spend (ROAS) and Advertising Cost of Sale (ACoS) come into play. Metrics like these show you at a glance how your ads are performing so you can be smart when allocating your ad dollars.
ROAS represents the return you get from your spend. If you spend $1 and make $3 that would be a “3” (also referred to as “3x” or “300%”). ROAS is the most common way of measuring ecommerce advertising campaigns.
ACoS is the percentage of your revenue that goes toward advertising. This is Amazon’s pet metric and is often used when measuring Amazon PPC campaigns. If you make $100 and spend $10 on advertising, your ACoS would be 10%.
Makes sense. But aren’t ROAS and ACoS really just two different ways of looking at the same thing?
Why yes. Yes they are.
So if you have one metric and need the other, we’ve provided a convenient way to quickly convert ACoS to ROAS and vice versa!