Why Total ACoS is Misleading for Amazon Advertising (Amazon PPC Reality Check)

Published on December 12, 2025

About this video

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In this Amazon advertising video, I explain why Total ACoS can be misleading when measuring your Amazon ads performance. Based on a LinkedIn poll where 89% of Amazon sellers use Total ACoS as their main success metric, I break down the critical limitations you need to understand.

The biggest issue with Total ACoS comes from external traffic campaigns. When you run Google ads, Facebook ads, or influencer marketing alongside your Amazon PPC campaigns, measuring true advertising performance becomes complex. You can easily track your total ad spend, but measuring the actual impact of external traffic on your Amazon sales is nearly impossible with current tools.

I walk through a specific example: if you spend 10k on Amazon ads and generate 40k in sales, your Total ACoS appears to be 25%. But when you factor in an additional 15k spent on Google Ads that contributed to 55k total revenue, your actual Total ACoS becomes 45%. This dramatic difference shows why relying solely on Amazon advertising metrics can lead to wrong decisions.

The same principle applies to influencer marketing campaigns. You might spend 500 dollars sending products to influencers who then drive massive viral sales, but you cannot accurately attribute this success to your Amazon advertising efforts alone.

I address the common debate in our industry where some claim ACoS is worthless while others treat it as the ultimate metric. The reality is that no single metric works for every situation. Whether you use Total ACoS, ACoS, return on ad spend, cost per acquisition, or new to brand metrics, success requires understanding the full context of what is happening in your specific Amazon account.

Effective Amazon PPC management requires looking at a blend of all marketing activities and their combined impact on your business revenue. Understanding these limitations helps you make better decisions about your Amazon advertising strategy and budget allocation.

Contents: 0:00 Why Total ACoS Can Be Misleading 0:39 The External Traffic Problem 1:40 Real Example: Amazon Ads vs Google Ads Impact 2:15 Influencer Marketing Attribution Issues 2:49 How to Actually Measure Amazon Advertising Profit 3:18 The Right Approach to Amazon PPC Metrics

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Transcript

Hi guys, in today's video something a little bit more different. As you can see, I want to talk about how total a cost on Amazon can be misleading. Why I say that? Recently, I ran a poll on LinkedIn and 98% 89% of you told that you use total a cost as a measure of success on Amazon and that's perfectly fine. But there are some exceptions where total a cost can be misleading. One of the most important ones uh is the external traffic. So if your brand is running any external traffic like Google ads, Facebook ads or any of that uh you need to factor that in. But there is an issue with that. Okay, it's easy to factor the total ad spend, but you cannot properly measure even with the advanced tools out there, you cannot properly measure the impact of external traffic being Google ads or Facebook ads or even here influencer marketing or anything else that you paid for outside of Amazon. So that you can say, okay, my total a cost is fixed. If you're running only Amazon ads and nothing outside of that, which is today's rarely the case, uh then total a cost can be okay, you know, but it's not absolutely okay, you know, because you don't measure incrementality. You don't measure the outside influence on the buying uh decision and behavior. So, that's one and there's there's an example. Okay, so you spend on Amazon ads 10 10k and your sales are 40k. Your total a cost would be 25. You would be happy if that's uh the desired number. In reality, you spend additional 15k on Google ads and the total business revenue is 55 and then when you so when you factor in Google ad spend with your Amazon ad spend, you get that your total a cost is actually 45. You know, it's it's not that simple. That's what I wanted to say. So, it's not like total AOS is the king and that's it. Same goes with the influencer marketing. You paid some of the influencers or you you you send some of the products to them. You cannot factor that in. So, maybe you invested, I don't know, $50 just to send your product or whatever the price is $500 to send your product to the influencer and they drove massive. they went viral and drove like tens or hundreds of thousands of dollars of sales. You cannot say your total a cost um was great because of Amazon. It's just not the case. You know, same goes with any paid content that you did online. So my point is uh yes total a cost is good but don't forget the a cost. I feel like in our industry everybody's now talking like a cost is trash. A cost doesn't mean anything. So how do you actually measure profit on Amazon if your ads are profitable or not? Okay, if you know the case is that you have everything external now uh everybody does something external. Um so you know don't hold to any of the metrics like it's the king or gold or whatever you like to call it. Total a cost is fine. A cost is fine. whatever somebody likes to to to use return on ad spend or whatever works for you, that's okay. Cost per acquisition, cost per um new customer, new to brand, whatever. It's a blend of everything that's happening on Amazon. It's a mix. It's a context on what's happening in every single account. There's not a single metric that works and that's that's it, you know. Um let me know your thoughts. I I I feel like this is a little bit strange for many, but yeah. Um I'm glad that I talked about it because I feel like total AOS is uh kind of really misleading. Uh stay tuned and see you on Monday uh with a new videos. Bye-bye.

Frequently asked questions

Why can Total ACoS be a misleading metric for Amazon advertising performance?

Total ACoS divides your total Amazon ad spend by your total Amazon revenue, but it only accounts for spend that runs through the Amazon ad console. If you are also running Google Ads, Facebook campaigns, or influencer marketing that drives sales on Amazon, those costs are excluded from the calculation. The result is an artificially low Total ACoS that makes performance look better than it actually is across the full marketing budget.

How much can external traffic distort your Total ACoS figure?

Significantly. Using the example from the video: spending $10,000 on Amazon ads against $40,000 in sales gives a Total ACoS of 25%. But if an additional $15,000 was spent on Google Ads that contributed to bringing total business revenue to $55,000, the true all-in advertising cost rate is 45%, nearly double. The gap widens further with any off-platform spend that is difficult to attribute, such as product seeding for influencer campaigns where a $500 investment may generate tens of thousands in sales that Amazon reports as organic.

If Total ACoS has limitations, which metrics should Amazon sellers use to evaluate advertising performance?

No single metric covers every situation. ACoS remains useful for evaluating the efficiency of individual campaigns in isolation. Total ACoS works when all marketing activity runs inside Amazon. Return on ad spend, cost per acquisition, and new-to-brand metrics each capture different aspects of performance. The most accurate view comes from looking at a combination of these metrics in context, factoring in every paid channel contributing to Amazon sales rather than relying on any one number as the definitive measure of success.