Amazon ads terms and the formulas behind them

What are typical ACOS, CPC and CVR on Amazon?

There is no single good ACOS: an ACOS is good when it sits below your contribution margin. For reference, at the median of 20 US brands we run, non-branded Sponsored Products clicks cost $1.74 and converted 13.1% of the time, at a 47.7% ACOS; branded clicks cost $1.54 and converted 24.7%, at 18.1%. How far each ran from store to store: what a good ACOS is and what an Amazon click costs.

• Branded clicks cost less and convert more. Within each store, branded clicks were 23% cheaper and converted 1.9 times as often as non-branded ones; branded ACOS was lower in all 20 stores.
• One blended ACOS hides that split. An account-wide ACOS mixes the two, so it can fall because more spend went to branded searches, not because bidding improved (branded vs non-branded on Amazon).
• Good depends on your margin. A 47.7% ACOS loses money on a product with a 30% contribution margin and makes money on one with 60%. See how to calculate break-even ACOS.

Metrics and formulas

Impressions

An impression is one showing of your ad to a shopper. Amazon charges Sponsored Products per click, not per impression, so impressions matter mainly as the base for CTR.

CTR

CTR, click-through rate, is the share of impressions that become clicks. Formula: clicks ÷ impressions. A low CTR usually points at the listing (image, price, rating, title) or a loose match between the search and the product.

CPM

CPM is the cost per thousand impressions, the way streaming TV ads and many display ads are priced (Amazon Ads). Formula: spend ÷ impressions × 1,000.

CPC

CPC, cost per click, is what you actually paid for a click, which can be below your bid. Formula: spend ÷ clicks. When it is above your keyword bid, a placement adjustment or dynamic bidding raised the bid that entered the auction (why CPC can exceed your bid; what Amazon clicks cost).

CVR

CVR, conversion rate, is the share of clicks that become orders. Formula: orders ÷ clicks. It is the number every bid depends on, and it differs by search and by placement for the same product.

Ad sales

Ad sales, or attributed sales, are the sales Amazon credits to your ads inside the attribution window. They are the denominator of ACOS and the numerator of ROAS.

Attribution window

The attribution window is how long after a click an order still counts for the ad. Amazon credits a seller’s Sponsored Products ad with orders placed within 7 days of the click, and 14 days for vendors (Amazon Ads), so repeat orders weeks later never show in ad reports. Sponsored Brands and display ads count longer (why ad types report different results).

AOV

AOV, average order value, is the revenue per order. Formula: sales ÷ orders.

ACOS

ACOS, advertising cost of sales, is ad spend as a share of the sales Amazon attributes to the ads (what a good ACOS is). Formula: ad spend ÷ ad sales; $50 of spend that brings $100 of ad sales is a 50% ACOS (Amazon Ads). Lower is more efficient, but a target ACOS says nothing about profit until you set it against your margin (is a target ACOS the best strategy?).

ROAS

ROAS, return on ad spend, is ad sales per dollar of ad spend, the inverse of ACOS. Formula: ad sales ÷ ad spend; a 50% ACOS is a ROAS of 2 (ACOS or ROAS: which to use).

TACOS

TACOS, total advertising cost of sales, is ad spend as a share of all your sales, paid and organic. Formula: ad spend ÷ total sales. It falls when organic sales grow faster than ad spend, which ACOS cannot show (what a good TACOS is).

Cost per order

Cost per order, also called CPA (cost per acquisition), is what you spend on ads for each order they bring, from new or repeat customers. Formula: ad spend ÷ ad orders, which is also CPC ÷ CVR (what an Amazon ad order costs).

CAC

CAC, customer acquisition cost, is what you spend on ads to win one new customer. Formula: ad spend ÷ new customers won. It sits above cost per order whenever some ad orders come from existing customers; see whether repeat purchases should raise your bids.

New-to-brand

A new-to-brand shopper is one who has not bought from your brand in the last 12 months, by Amazon’s definition (Amazon Ads). New-to-brand orders and their share of all orders show how much of your ad spend wins new customers.

Contribution margin

Contribution margin is what one order leaves after the cost of goods, Amazon’s referral and fulfillment fees and expected returns, before ad spend. As a share of price it is the margin every bid should be priced from: a $40 product that leaves $12 has a 30% contribution margin.

Break-even ACOS

Break-even ACOS is the ACOS at which an ad-driven order makes no profit on its first purchase: your contribution margin as a share of price. Break-even ROAS is its inverse, so a 30% margin breaks even at a 30% ACOS, or a ROAS of 3.33 (how to calculate it).

Bidding and placements

Bid

A bid is the most you will pay for one click on a keyword or product target. Placement adjustments and dynamic bidding can raise the bid that enters the auction, and Amazon caps your CPC at that maximum effective bid (Amazon Ads).

Break-even CPC

Break-even CPC is the most a click is worth to you before it loses money on the first order. Formula: CVR × contribution margin per order; a 10% CVR on a $12 margin makes a click worth $1.20 (how to work it out).

Suggested bid

Amazon’s suggested bid is built from the bids that won impressions for ads like yours over the past 7 days (Amazon Ads). It shows what wins the auction, not what your click is worth; see what starting bid to use.

Second-price auction

A second-price auction charges the winner just above the runner-up’s bid instead of its own. Amazon says a click’s price may exceed the runner-up bid but never your maximum bid (Amazon Ads). In August 2026 the FTC and 22 states alleged that Sponsored Products advertisers were charged their own winning bid close to 80% of the time; Amazon calls the suit misguided, and the claims are unproven (what the FTC suit alleges).

Placement

A placement is where a Sponsored Products ad shows: top of search (first page), rest of search, or product pages. The same keyword converts and costs differently in each, so each can carry its own bid adjustment (how to bid each placement).

Top of search

Top of search is the sponsored slots in the top row of the first page of search results. It usually has the highest CVR and the highest CPC; in our accounts, non-branded top-of-search clicks converted 2.1 times as often as product-page clicks at the median store.

Rest of search

Rest of search is every sponsored slot in the search results outside the top row of page one: lower on the first page and on later pages.

Product pages

Product pages is the placement for ads shown on other products’ detail pages, such as the sponsored carousels under a competitor’s listing, and other placements beyond the search results.

Placement adjustment

A placement adjustment raises the bid by a percentage you set, up to 900%, for one placement in one campaign (Amazon Ads). It applies to every keyword in that campaign (how placement adjustments work).

Dynamic bidding

Dynamic bidding is a campaign setting that lets Amazon change your bid at auction time. “Down only” lowers it by up to 100% when a click is less likely to convert; “up and down” can also raise it by up to 100% in any placement; “fixed bids” uses your bid and adjustments exactly as set (Amazon Ads; which to use).

Targeting and campaign structure

Campaign

A campaign is the container for your ads: it has its own daily budget, targeting type (manual or automatic), bidding strategy and placement adjustments, and holds one or more ad groups.

Ad group

An ad group is a set of products to advertise and the keywords or product targets they bid on, inside a campaign. Every product in an ad group shares its targets.

Portfolio

A portfolio is a folder for campaigns, used to group them by brand or product line, with an optional budget cap for all of them together; once the campaigns reach the cap, their ads pause (Amazon Ads; how portfolio budget caps work).

ASIN

An ASIN, Amazon Standard Identification Number, is the code for one product listing. A child ASIN is one size, color or scent; a parent ASIN groups them. In a search term report, an ASIN in place of a search is a product page your ad showed on.

Keyword

A keyword is a word or phrase you bid on, with a match type that sets how closely a shopper’s search must match it (keyword vs search term).

Search term

A search term is what the shopper actually typed. One phrase or broad keyword can match many search terms, and the search term report lists which ones brought a click.

Match type

A match type sets which searches a keyword can show for. Exact covers the keyword and its close variations, such as plurals; phrase covers searches that contain the phrase; broad covers the words in any order, synonyms and related searches that may not contain the keyword at all (Amazon Ads; which to use).

Negative keyword

A negative keyword stops your ad from showing on matching searches. Negative exact blocks one search and its close variations (up to 10 words); negative phrase blocks every search containing the phrase (up to 4 words). Negatives can take up to 72 hours to apply (Amazon Ads; when to add them).

Automatic targeting

Automatic targeting lets Amazon match your ad to searches and product pages from your listing, in four groups: close match, loose match, substitutes and complements (Amazon Ads). It finds searches you would not have listed; see how to move them into manual campaigns.

Product targeting

Product targeting bids on chosen products’ pages, by ASIN, instead of on searches, so your ad shows beside those products. It is how you advertise on a competitor’s listing or cross-sell on your own.

Category targeting

Category targeting is product targeting aimed at a whole category of products rather than chosen ASINs.

Branded search

A branded search names your brand or one of your products. These shoppers often already know you, so the clicks convert more and cost less; run them in their own campaigns with their own target (should you advertise on your brand name?).

Non-branded search

A non-branded search names a product type or need rather than your brand, such as “insulated water bottle”. It is where most demand and most new customers come from, and where clicks cost the most per order.

Competitor search

A competitor search names another brand. The shopper asked for someone else, so fewer buy yours; bid from what those clicks are worth, in their own campaign (should you bid on competitor names?).

Ad types

Sponsored Products

Sponsored Products ads promote one product and look like a normal listing with a “Sponsored” label, in search results and on product pages. They are targeted by keyword or product, paid per click, and where most Amazon advertisers start (which ad type to start with).

Sponsored Brands

Sponsored Brands ads show your logo, a custom headline and several of your products, or a video, mostly at the top of search results. They are targeted by keyword or product, and sellers need Amazon Brand Registry to run them (what Sponsored Brands needs).

Display ads (Sponsored Display)

Display ads reach shoppers on and off Amazon, on product pages, the Amazon home page and other sites and apps, targeted by product, category or audience, such as shoppers who viewed a product but did not buy. Amazon renamed Sponsored Display to display ads, and existing Sponsored Display campaigns keep running (Amazon Ads; what display ads are used for).

Streaming TV ads (Sponsored TV)

Streaming TV ads are Amazon’s self-service TV ads with no minimum spend. Amazon renamed Sponsored TV to streaming TV ads, and existing Sponsored TV campaigns keep running (Amazon Ads; what streaming TV ads do).

Amazon DSP

Amazon DSP is Amazon’s demand-side platform: technology for buying display, video and audio ads programmatically, on Amazon and across other sites, apps and streaming services. Amazon now offers it as part of Amazon Ads Agent (Amazon Ads; when DSP makes sense).

Budgets

Daily budget

A daily budget is what a campaign may spend on an average day, averaged over the calendar month: on a busy day it can spend up to 25% or 100% more, depending on your account setting, but the month’s total stays within the daily budget times the days in the month (Amazon Ads; can Amazon spend more than your daily budget).

Out of budget

A campaign is out of budget when it has spent its daily budget. Its ads stop showing until the budget resets at midnight, and daily budgets are not paced through the day, so a small budget can run out within minutes (Amazon Ads; whether to raise a budget that runs out).

Budget rules

Budget rules raise a campaign’s budget automatically on your terms. Schedule-based rules set a budget in advance for an event such as Prime Day or a date range; performance-based rules raise it when the campaign meets a threshold such as a ROAS, CTR or CVR (Amazon Ads; how to budget for Prime Day).

Reports and tools

Search term report

The search term report lists the searches that brought at least one click on your ads, with the keyword each matched, clicks, orders and spend, looking back 65 days (Amazon Ads; how to use it).

Search term impression share

The search term impression share report shows your share of the ad impressions on each search and your rank against other advertisers, for searches your ads already reach (Amazon Ads).

Brand Analytics

Brand Analytics is Amazon’s set of dashboards for brand owners, including Search Query Performance and Top Search Terms. It needs a Professional selling account and the Brand Representative role for a brand in Brand Registry (Amazon; how to use it for keywords).

Search Query Performance

Search Query Performance is the Brand Analytics dashboard that lists the searches shoppers use to find your brand, with each search’s volume and your impressions, clicks, cart adds and purchases (Amazon).

Search frequency rank

Search frequency rank is how popular a search is across Amazon in Brand Analytics’ Top Search Terms dashboard, where 1 is the most searched. It is a rank, not a count of searches, shown with the top three products, categories and brands for each search.

Amazon Marketing Cloud

Amazon Marketing Cloud (AMC) is Amazon’s clean room: a secure, cloud-based service where advertisers query pseudonymized Amazon Ads signals with their own data and get back only aggregated results (Amazon Ads). It is how repeat purchases and new-customer value are measured beyond the attribution window.

Organic rank

Organic rank is where a listing appears among the unpaid results for a search. Ads and organic results share the page, so the sales an ad brings can move a product’s organic rank, and a strong organic rank changes how much a branded ad adds.

How we measured this. Sponsored Products search term reports (Amazon Ads API) for 20 US stores on the Laurence platform, August 6 to November 3, 2026, at Amazon’s default attribution window. Searches for a store’s own brand or its own products are branded; every other search, competitors’ brands included, is non-branded. Each metric is computed per store first, then summarized as the median across stores; no store is named.