TACoS shows how dependent a marketplace business is on advertising. If sales grow while TACoS falls, ads are building organic rank and demand; if TACoS rises, you are increasingly paying for sales you used to get for free.
Formula
TACoS = Ad spend ÷ Total sales × 100
Example
₹2 lakh of ad spend against ₹16 lakh of total sales is a TACoS of 12.5%.
Convert between ROAS and ACoS instantly, calculate TACoS and MER, and see the break-even point for your margin.
Related terms
- ACoS (advertising cost of sale)ACoS is ad spend divided by ad-attributed sales, expressed as a percentage; it is the inverse of ROAS.
- MER (marketing efficiency ratio)MER is total revenue divided by total marketing spend across every channel.
- Take rateTake rate is the share of gross merchandise value that a marketplace or platform keeps through commission, advertising and fees.
Part of the growth marketing glossary by Shiva Sharma.