Amazon PPC
Amazon TACoS: What It Is, Why It Matters, and How to Optimize It (2026)
Feb 15, 2026
TACoS is the metric that separates Amazon operators from Amazon amateurs. Most sellers obsess over ACoS — Advertising Cost of Sale. And ACoS matters. But if ACoS is the only metric driving your decisions, you're optimizing a piece while ignoring the whole. TACoS gives you the whole picture, and once you understand it, you'll never look at Amazon advertising the same way.
After managing 50+ brands with $205M+ in total Amazon sales, I've watched TACoS transform how brand owners think about ad spend — from a cost to be minimized into an investment to be optimized. This guide breaks down exactly what Amazon TACoS is, why it's the metric you should be tracking, and how to lower it without sacrificing growth.
What Is Amazon TACoS?
TACoS stands for Total Advertising Cost of Sale. It's calculated as:
TACoS = Total Ad Spend / Total Revenue × 100
Notice the key difference from ACoS: the denominator is total revenue — both paid (ad-attributed) and organic sales combined. ACoS only looks at revenue from ad clicks. TACoS looks at your complete revenue picture relative to advertising investment.
Example:
Monthly ad spend: $5,000
Ad-attributed revenue: $20,000 (ACoS = 25%)
Organic revenue: $30,000
Total revenue: $50,000
TACoS = $5,000 / $50,000 = 10%
Your ACoS is 25%, but your TACoS is only 10%. That 15-point gap represents the organic sales your advertising helped generate and sustain.
Why Does TACoS Matter More Than ACoS?
Here's the problem with managing by ACoS alone.
ACoS Punishes Growth
Imagine you're launching on a new keyword. Your ACoS is 40% in the first month — terrible by most standards. But that PPC spend is driving sales velocity on the keyword, which is improving your organic rank. By month 3, you're ranking on page 1 organically and generating $15,000/month in organic sales on that keyword alone.
If you killed the campaign in month 1 because ACoS was "too high," you'd never have captured that organic revenue. ACoS said stop. TACoS would have told you to keep investing.
ACoS Hides Dependency
Conversely, your branded campaigns might show 8% ACoS — looks incredible. But those shoppers were searching your brand name. They would have found you organically. You're paying for sales you'd get for free. ACoS says this is your best campaign. TACoS reveals the spend is nearly zero value-add.
TACoS Shows the Advertising Flywheel
The ideal trajectory on Amazon looks like this:
Total revenue increases quarter over quarter
TACoS decreases quarter over quarter (or stays flat)
This means organic revenue is growing faster than ad spend
When revenue grows and TACoS shrinks, it means your advertising is building organic momentum. You're getting more sales per dollar of ad spend because PPC is earning organic rank that generates free traffic.
When revenue is flat and TACoS is rising, you're in trouble. It means you're becoming more dependent on ads to maintain the same revenue. Your organic rank is eroding and ads are compensating for it.
What Is a Good TACoS on Amazon?
TACoS benchmarks vary by category, product lifecycle, and strategy, but here are general ranges from our portfolio:
Mature products with strong organic rank: 5-10% TACoS
Growing products building organic presence: 10-15% TACoS
New product launches: 15-25% TACoS (sometimes higher)
Highly competitive categories: 12-20% TACoS even for established products
The trend matters more than the number. A brand at 18% TACoS and declining is in better shape than a brand at 10% TACoS and rising.
How Do You Calculate and Track TACoS?
The Basic Calculation
Pull two numbers from Seller Central:
Total ad spend — From Campaign Manager or Advertising Reports
Total revenue — From Business Reports (including organic + paid sales)
Divide spend by revenue. Track this monthly at minimum.
Track TACoS by Product
Total account TACoS is useful, but product-level TACoS is where the insights live. A product with 5% TACoS might be subsidizing a product with 30% TACoS, and the average looks fine while one product is burning money.
Build a simple spreadsheet:
| Product | Ad Spend | Total Revenue | TACoS | Trend |
|---------|----------|---------------|-------|-------|
| Product A | $2,000 | $25,000 | 8% | ↓ Improving |
| Product B | $3,000 | $12,000 | 25% | ↑ Worsening |
| Product C | $1,000 | $8,000 | 12.5% | → Stable |
Product B needs investigation. Is it a new launch still building organic rank? Or is it a declining product becoming ad-dependent? The answer determines the action.
Track TACoS by Keyword
For advanced optimization, look at TACoS at the keyword level. Use the Search Query Performance Report to see your organic impression share and click share alongside your PPC performance.
If a keyword has:
Strong PPC sales but low organic rank → Keep investing. PPC is building toward organic.
Strong organic rank and strong PPC spend → Test reducing PPC on this keyword. You might be over-investing on a keyword you already own organically.
Declining organic rank → Something changed. Check competitors, listing changes, or review issues.
How Do You Lower Amazon TACoS?
Lowering TACoS means increasing total revenue relative to ad spend. There are two sides to this equation: growing organic sales and improving ad efficiency.
Strategy 1: Build Organic Rank Through PPC
This sounds counterintuitive — spend more on ads to lower TACoS? — but it works when done strategically.
Identify your highest-potential keywords: terms with strong search volume where you rank on page 2-3 organically. Run aggressive PPC on these keywords for 4-8 weeks. The sales velocity from PPC pushes your organic rank to page 1. Once you're ranking organically, you can reduce PPC spend on those keywords while maintaining total revenue.
We run this playbook across our portfolio regularly. The initial ACoS on the aggressive push is high — often 30-40%. But the TACoS impact over 90 days is dramatically positive because the organic sales generated far exceed the temporary ad investment.
Strategy 2: Improve Listing Conversion Rate
Every conversion rate improvement lowers TACoS in two ways:
Your PPC becomes more efficient (lower ACoS because the same clicks generate more sales)
Your organic rank improves (higher conversion rate = better organic positioning = more organic sales)
This is the highest-leverage play. We've run 10,000+ A/B tests and consistently see that a 2-3% conversion rate improvement drops TACoS by 15-25% over 6-8 weeks because of the compounding effect.
Where to test: main image first, then title, then A+ Content.
Strategy 3: Reduce Wasted Ad Spend
Not all TACoS reduction requires growing revenue — you can also cut waste.
Negate irrelevant search terms — Pull search term reports and negate any term with spend and zero conversions.
Reduce branded campaign spend — If your branded campaigns have 5% ACoS, test lowering bids. If you own the organic position for your brand terms, aggressive PPC on them isn't adding much.
Daypart to cut dead hours — If your data shows zero conversions between midnight and 6 AM, reduce or pause spend during those hours.
Pause underperforming products — If a product consistently has 30%+ TACoS with no improvement trend, the ad spend might be better allocated to products with organic growth potential.
Strategy 4: Expand Organic Revenue Streams
More organic sales at constant ad spend = lower TACoS.
Optimize backend keywords — Many sellers leave indexing opportunities on the table. Fill all 250 bytes of backend search terms.
Build an Amazon Storefront — Branded storefronts get indexed and provide a destination for Sponsored Brands traffic that showcases your full catalog.
Leverage Posts and Brand Content — Amazon Posts, Brand Story, and A+ Content provide additional organic discovery channels.
Encourage reviews — Higher review count and rating directly improve organic conversion rate and ranking.
TACoS vs. ACoS: When to Use Each
Both metrics have their place.
Use ACoS when:
Evaluating individual campaign efficiency
Setting bids on specific keywords
Comparing performance between ad groups
Determining if a specific campaign is profitable
Use TACoS when:
Evaluating overall advertising strategy
Deciding whether to increase or decrease total ad spend
Measuring the organic impact of your advertising
Reporting to stakeholders on advertising ROI
Making long-term investment decisions about product growth
The mistake to avoid: making strategic decisions based on ACoS alone. I've seen brands slash ad spend because ACoS was 30%, only to watch organic revenue drop 40% over the next 3 months because PPC was propping up their ranking. Their TACoS was actually healthy at 12% — but they never looked at it.
Common TACoS Mistakes
Ignoring it entirely. Most Amazon sellers don't track TACoS at all. They're managing a flywheel while only looking at one gear. Expecting immediate improvement. TACoS optimization plays out over 60-90 day windows. Organic rank changes from PPC take weeks to materialize. Weekly TACoS fluctuations are noise. Cutting ad spend to lower TACoS. If you reduce ad spend from $10K to $5K, your TACoS will initially appear to improve. But if that ad spend was maintaining organic rank, you'll see organic revenue decline over the following months, and TACoS will end up higher than where you started. Applying the same TACoS target to every product. A new launch, a mature product, and a declining product all have different appropriate TACoS ranges. One size doesn't fit all.
What To Do Next
If you've been managing Amazon advertising by ACoS alone, start tracking TACoS this week. The shift in perspective changes everything — which campaigns to scale, which to cut, and how to think about the relationship between paid and organic growth.
Book a free strategy call — We'll analyze your TACoS trends, identify where your ad spend is building organic momentum and where it's being wasted, and give you a clear strategy for improving the ratio. This is the analysis that consistently unlocks the next level of growth for the brands we work with.
Hunter Harris is the founder of GigaBrands, an AI-assisted Amazon growth agency managing 50+ brands with over $205M in total Amazon sales.