ACOS vs ROAS

ACOS is ad spend as a percentage of ad revenue, while ROAS is ad revenue divided by ad spend, so each is the inverse of the other.

By Berend Vrakking, founder of Product Metrics. Updated 7 October 2026.

Formula

ACOS = ad spend ÷ ad revenue × 100 · ROAS = ad revenue ÷ ad spend · ACOS = 100 ÷ ROAS

Break-even ACOS is the margin as a percentage, and break-even ROAS is 1 ÷ margin. Use the margin left after all variable costs, not the markup.

Example

ACOS and ROAS side by side, for a product with a 30% margin
ACOS	ROAS	Reading	Margin − ad spend, per €100.00 of ad revenue
20%	5	Profit	€30.00 − €20.00 = €10.00
25%	4	Profit	€30.00 − €25.00 = €5.00
30%	3.33	Break-even	€30.00 − €30.00 = €0.00
33.3%	3	Loss	€30.00 − €33.33 = −€3.33
50%	2	Loss	€30.00 − €50.00 = −€20.00

Every €100.00 of ad revenue leaves €30.00 of margin to pay for the ads. An ACOS below 30%, or a ROAS above 3.33, earns a profit. Illustrative data.

For one product, and for an account

Break-even moves with margin, so it moves from product to product. A product with a 50% margin can run at an ACOS of up to 50%, a ROAS of 2, before it stops earning. Set one account-wide target of 40% and the 30% product in the table loses money, while the 50% product is held back on a lead it never needed.

ACOS is the metric Amazon Ads works in, while Google Ads sets target ROAS as a percentage: a 500% target means €5.00 of conversion value per €1.00 spent, which is an ACOS of 20%. If you advertise on both, convert to one metric before comparing products.

Common mistake

Subtracting from 100 to convert. It feels tidy and gives the wrong answer: an ACOS of 25% is a ROAS of 4 (100 ÷ 25), not 0.75 or 75%.

Questions

Is ACOS the inverse of ROAS?

Yes. Amazon’s ACOS guide calls ROAS the inverse of ACOS, so divide 100 by either one to get the other. A ROAS of 4 is an ACOS of 25%, and an ACOS of 20% is a ROAS of 5.

What is break-even ACOS?

Break-even ACOS is the ACOS at which ad spend uses up all of a product’s margin, so it equals the margin as a percentage. Amazon’s guide says ACOS needs to be lower than your profit margin to keep a profit. With a 30% margin, break-even ACOS is 30% and break-even ROAS is 3.33.

Should I use ACOS or ROAS?

They carry the same information, so use the one your ad platform reports and set the target from each product’s margin. A lower ACOS and a higher ROAS both mean less ad spend per euro of revenue.

Sources

Keep reading

ROASReturn on ad spend, its formula and a worked example.
Contribution marginThe margin that sets break-even ACOS and break-even ROAS.
Break-even ROAS calculatorFind the return each product needs to break even.
How to calculate ROASThe ROAS formula step by step, including the ACOS conversion.
What is a good ROAS?Read your return against each product’s own break-even.
POAS vs ROASMeasure profit per euro of ad spend instead of revenue.