ACoS vs TACoS
Say you spend ₹1,00,000 on ads, ads bring in ₹5,00,000 in sales, and organic sales add another ₹5,00,000. ACoS is ₹1,00,000 ÷ ₹5,00,000 = 20%. TACoS is ₹1,00,000 ÷ ₹10,00,000 = 10%.
ACoS judges the ads in isolation. TACoS shows what advertising costs as a share of the whole business, which is closer to how a business owner thinks about it.
How to read the trend
The number matters less than its direction over a few months.
- TACoS falling, sales rising: ads are lifting organic rank. Healthy.
- TACoS rising, sales flat: you are paying more for the same business. Look at ACoS and keywords.
- TACoS flat, sales rising: ads and organic are growing together. Fine.
- TACoS falling, sales falling: you cut ads and organic followed. Spend may have been holding up rank.
When a high ACoS is fine
During a launch or a festive sale, ACoS can run above break-even on purpose to win ranking and reviews. Judge it by TACoS: if TACoS falls over the following weeks, the extra spend bought organic sales.
Outside those windows, keep ACoS below your margin before ads. In one account, restructuring the campaign hierarchy, moving top performers to exact match and adding negative keywords weekly brought ACoS from 28% to 17%.