TACoS

Total advertising cost of sales: your ad spend divided by total sales, organic and ad-driven together, shown as a percentage.

You take all your ad spend for a period and divide it by all revenue for that same period, not just the slice ads were credited with. Because it includes organic, TACoS is a trend you watch over weeks rather than a knob you turn on a single campaign.

Your ads for the month equal 5 percent of everything the brand sold that month, organic included. Your TACoS is 5 percent.

The direction matters more than the level. People optimize ACoS in isolation and never look at TACoS. A TACoS that falls while total sales rise means your ads are seeding organic rank and carrying less of the load. A TACoS creeping up while sales stay flat means you are buying volume you used to get for free.

ACoS tells you how a campaign is doing. TACoS tells you whether the whole account is getting healthier.