TACoS vs ROAS: Which Metric Actually Matters for Amazon Growth?

Introduction

If you’ve ever looked at your Amazon Ads dashboard and wondered whether to focus on ROAS or TACoS, you’re not alone.
Both metrics tell you something about performance — but only one shows whether your brand is actually growing profitably.

In this post, we’ll break down the difference between TACoS (Total Advertising Cost of Sales) and ROAS (Return on Ad Spend) — and reveal which one truly matters when scaling your Amazon business.

What Is ROAS? (Return on Ad Spend)

ROAS measures how much revenue you generate for every dollar spent on ads.

ROAS = Ad Revenue / Ad Spend

For example, if you spend $1,000 and generate $4,000 in attributed sales, your ROAS is 4.0x (or 400%).

Why it matters:
ROAS is a campaign-level efficiency metric. It tells you how well your ads are performing within Amazon Ads — but it doesn’t capture the bigger picture of your brand’s organic health.

Limitations:

• Doesn’t include organic sales growth.

• Can look great even when overall profitability is shrinking.

• Encourages short-term optimization (turning off top-of-funnel ads that build awareness).

What Is TACoS? (Total Advertising Cost of Sales)

TACoS stands for Total Advertising Cost of Sales, and it measures ad spend as a percentage of total revenue (both paid and organic).

TACoS = AdSpend / Total Sales X 100

So, if you spend $1,000 and your total sales (ads + organic) are $10,000, your TACoS is 10%.

Why it matters:
TACoS reflects the health of your entire Amazon business. When your TACoS decreases over time while revenue grows, it means your ads are fueling organic growth — the holy grail of Amazon advertising.

Key insight:

ROAS shows how your ads performed.
TACoS shows how your business performed.

TACoS vs ROAS: The Real Difference

In other words:

• ROAS = “How good are my ads?”

• TACoS = “How healthy is my brand overall?”

Which Metric Actually Matters for Growth?

If your goal is short-term performance (e.g., testing a new product, proving ad efficiency), ROAS is your friend.
But if your goal is sustainable, compounding growth, TACoS is the metric that truly matters.

Here’s why:

1. TACoS rewards long-term brand building.
   As organic rank improves, you rely less on ads to drive sales.

2. TACoS protects margin as you scale.
   You can monitor profitability even when ad spend increases.

3. TACoS correlates with market share.
   Lower TACoS over time = stronger organic visibility and repeat customers.

Example: The TACoS “Health Curve”

Let’s say you launch a product:

👉 Even though ad spend increased, TACoS dropped — meaning ads are driving sustainable growth through improved ranking and organic sales lift.

When to Use Each Metric

Pro Tip: Track Both, But Prioritize TACoS Trends

At Brand GrowthIQ, we recommend clients track both metrics — but judge performance based on TACoS direction, not ROAS magnitude.

• A falling TACoS (with stable sales) = strong organic momentum.

• A rising TACoS = ads aren’t creating sustained visibility.

• A flat TACoS = you’ve likely hit an equilibrium; time to launch new products or optimize listings.

Final Thoughts

Both ROAS and TACoS have value — but if you care about long-term brand growth, TACoS wins every time.
It tells you whether your advertising is actually building a business — not just buying revenue.

If your TACoS isn’t trending down over time, your ad strategy probably needs a refresh.

Ready to Lower Your TACoS and Scale Profitably?

At Brand GrowthIQ, we help Amazon sellers optimize their campaigns, improve listing conversion, and grow total sales — not just ad sales.

👉 Book a free 30-minute strategy call to uncover how your TACoS and ROAS metrics stack up — and what you can do to grow smarter.