Formula Appendix

ACOS

Formula: Ad Spend / Ad Sales

Example: $200 spend / $1,000 ad sales = 20% ACOS

ROAS

Formula: Ad Sales / Ad Spend

Example: $1,000 ad sales / $200 spend = 5.0 ROAS

TACOS

Formula: Ad Spend / Total Sales

Example: $200 spend / $2,000 total sales = 10% TACOS

Break-even ACOS

Formula: Gross Margin %

Example: If margin is 35%, break-even ACOS is about 35% before other costs.

Target CPC

Formula: Price x Target ACOS x Conversion Rate

Example: $20 price x 25% target ACOS x 10% CVR = $0.50 target CPC