Why Optimizing For ACoS Is Not Sufficient

Amazon Advertising – ACoS is Not Enough

One question I love asking marketers on Amazon is what are they trying to achieve by advertising on Amazon, particularly through sponsored ads? Most mature marketers will say something along the lines of:

• Grow incremental sale
• Grow market share
• Grow share of page one

Then I ask what metrics they track, optimize or measure their agency on. Almost invariably it’s ACoS (Advertising Cost of sales) which is essentially how much money did you spend for $1 in ad attributed sales, or Ad spend divided by Paid sales. It’s understood that the lower the ACoS, the better the performance of your advertising campaigns.

Hmm…, this makes me scratch my head. How does optimizing on ACoS drive the objectives listed above? Here’s the challenge with an over reliance on ACoS.