What is TACOS (Total Advertising Cost of Sale)?
TACOS measures total ad spend as a percentage of total revenue. It shows how dependent overall sales are on advertising.
Understanding TACOS
Unlike ACOS (ad spend ÷ attributed revenue), TACOS uses total revenue in the denominator. If TACOS rises while ACOS stays flat, advertising is doing more of the heavy lifting. TACOS helps you see whether overall sales dependence on ads is increasing or decreasing. It is useful for planning and executive reporting where blended outcomes matter more than channel‑specifics. Pair TACOS with margin metrics so rising spend doesn’t mask profit erosion.
Context matters for TACOS. Promo periods, pricing changes, and macro shifts can move total revenue independent of media efficiency. Segment TACOS by product category and lifecycle to see where advertising is carrying growth versus riding organic demand. Use TACOS trends to set guardrails while channel‑level KPIs drive daily optimization. Read over monthly/quarterly windows to avoid noise.
Why TACOS (Total Advertising Cost of Sale) matters
TACOS matters because it provides a portfolio view of overall advertising efficiency relative to total business revenue, not just attributed sales. Rising TACOS signals that advertising is driving a larger share of revenue, which may indicate healthy growth or increasing dependence on paid channels. Monitoring TACOS helps balance investment between brand building, retention programs, and paid acquisition to maintain sustainable unit economics.
- Portfolio view: Understand overall efficiency
- Trend signal: Detect when ads drive a larger share of revenue
- Planning: Balance brand/retention programs against paid
How TACOS works
TACOS works by dividing total ad spend by total revenue over a defined period, showing the share of sales driven alongside advertising. Because it’s blended, it smooths channel variance but can hide margin issues. Keep definitions and windows consistent across reports. Watch TACOS alongside POAS and MER to ensure profit and efficiency move together. If TACOS rises without profit growth, revisit promo strategy, product mix, or creative quality.
