If you sell on Amazon, chances are you spend a lot of time looking at two numbers: ACOS and ROAS.
And for good reason.
ACOS (Advertising Cost of Sales) tells you how much you’re spending on advertising relative to the sales those ads generate. ROAS (Return on Ad Spend) tells you how much revenue you’re generating for every dollar spent on advertising.
Both are important.
But here’s the problem:
If ACOS and ROAS are the only Amazon advertising metrics you’re watching, you’re missing a big part of the story.
Those metrics can tell you what is happening, but they don’t always tell you why it’s happening.
To optimize Amazon advertising effectively, you need to look deeper into the numbers.
Here are the Amazon Ads metrics I recommend watching beyond ACOS and ROAS.
- Conversion Rate
One of the first metrics I would look at is conversion rate.
Your conversion rate tells you what percentage of shoppers who click on your ad ultimately purchase.
Why does this matter?
Because advertising performance doesn’t exist independently of your product listing.
Imagine you’re generating plenty of clicks, but very few of those shoppers are buying. You could immediately assume that your bids are too high or your targeting is wrong.
But the real problem could be your listing.
Perhaps your main image isn’t compelling. Maybe your product description isn’t communicating the value proposition. Your reviews may not be competitive with other products in the category. Your price could be too high.
Or perhaps you’re simply attracting the wrong shoppers.
That’s why conversion rate is so valuable.
When conversion rate is low, don’t automatically start changing your advertising campaigns. First ask:
Are we sending the right shoppers to a listing that is capable of converting them?
That’s a much more useful question.
- Click-Through Rate (CTR)
Next, look at click-through rate, or CTR.
CTR measures how frequently shoppers click your ad after seeing it.
Think about the Amazon advertising funnel:
Impressions → Clicks → Sales
Impressions tell you that Amazon showed your ad.
CTR tells you whether shoppers found the ad compelling enough to investigate your product.
If your impressions are high but your CTR is low, you have plenty of visibility—but shoppers aren’t responding.
There can be several reasons for this.
Your product may not be sufficiently relevant to the search. Your competitors may have more compelling offers. Your product images or title may not stand out. Or the keyword you’re targeting may simply not align closely enough with what shoppers want.
CTR shouldn’t be evaluated in isolation, because benchmarks vary by campaign type, category, placement, and product.
But as a trend, it can be extremely valuable.
- Cost Per Click (CPC)
Another important metric is cost per click, or CPC.
CPC tells you how much you’re paying, on average, for each click generated by your advertising.
Why does that matter?
Because your CPC directly affects the economics of acquiring customers.
Let’s say your conversion rate remains constant.
If your average CPC increases from $1 to $2, you’ve doubled the amount you’re paying to generate each click.
If nothing else changes, your cost to acquire a sale will increase as well.
That’s why I don’t recommend looking at ACOS alone.
Ask:
How much am I paying for each opportunity to generate a sale?
Then compare that number with your conversion rate and your profit per order.
CPC, conversion rate, and profit margin together can tell you much more about the health of a campaign than a single ACOS percentage.
- Search-Term Performance
One of the biggest mistakes Amazon advertisers make is stopping their analysis at the campaign level.
You might look at a campaign and see a perfectly acceptable ACOS.
But what’s happening underneath that campaign?
This is where search-term performance becomes incredibly important.
Look for the search terms that are generating sales and identify the terms that are spending money without producing the results you need.
For example, you could have one search term generating highly profitable sales while another term inside the same campaign is consuming a significant portion of your budget without converting.
The overall campaign ACOS could hide that difference.
By drilling down into search-term performance, you can identify where to increase investment and where to reduce or eliminate wasted spend.
In other words:
Don’t just ask whether a campaign is profitable. Ask which searches are making it profitable.
- New-to-Brand Customers
If your Amazon account provides access to new-to-brand reporting, this is another metric worth paying attention to.
Not every sale has the same strategic value.
A purchase from an existing customer who already knows your brand can be valuable. But acquiring a brand-new customer may have additional long-term value.
This becomes particularly important when your objective is brand growth rather than simply maximizing short-term advertising revenue.
Instead of asking only:
“How much revenue did this campaign generate?”
you can also ask:
“How many new customers did this campaign help us acquire?”
That gives you another dimension for evaluating your advertising investment.
Ideally, you can combine that information with your broader customer economics and lifetime value.
- Impression Share
Another useful metric, where available for the campaign type you’re using, is impression share.
Impression share can help you understand how much of the available opportunity you’re actually capturing.
Let’s say you’ve identified a keyword that converts extremely well and generates profitable sales.
If you’re only receiving a fraction of the available impressions, you may have an opportunity to increase your visibility.
That is very different from a keyword that’s receiving substantial exposure but isn’t converting.
This is another reason why you shouldn’t make advertising decisions based on a single metric.
You need to understand the relationship between:
Visibility → Clicks → Conversions → Profitability
Each stage tells you something different.
- Profit
And finally, there’s the metric that matters most:
Profit.
I know. What a crazy concept.
But seriously, revenue isn’t profit.
You can have an impressive ROAS and still lose money.
Let’s say your product sells for $50.
If product costs, Amazon fees, fulfillment, shipping, and other expenses consume most of that $50, you don’t have $50 available to spend on advertising.
You have a much smaller amount available to acquire the customer.
That’s why understanding your break-even ACOS is so important.
Your break-even ACOS represents the maximum percentage of sales you can spend on advertising before the advertising expense causes you to lose money, based on your other costs and margins.
Once you know that number, ACOS becomes much more meaningful.
A 20% ACOS could be fantastic for one product and completely unsustainable for another.
It all depends on the economics of the business.
How These Metrics Work Together
The real power comes from looking at these metrics together rather than evaluating each one independently.
For example:
Impressions are down:
You may have a visibility, targeting, bid, or budget issue.
Impressions are up but CTR is down:
You may have an issue with relevance or the attractiveness of your offer.
Clicks are up but conversion rate is down:
You may be attracting traffic that isn’t converting, or your product listing may need attention.
Conversion rate is strong but CPC is too high:
Your targeting may be working, but you’re paying too much for the traffic.
ACOS looks great but you’re not making money:
Your margins or other costs may be the real problem.
This is why Amazon advertising optimization isn’t simply about getting your ACOS as low as possible.
Don’t Optimize the Metric. Optimize the Business.
ACOS and ROAS are useful metrics.
But they’re not the ultimate objective.
A very low ACOS isn’t automatically a sign of a successful advertising program. In some situations, aggressively reducing ad spend can also reduce sales, visibility, and customer acquisition.
Likewise, a high ROAS isn’t automatically a problem if you’re deliberately investing in customer acquisition and have the margins to support that investment.
The objective should be to understand how your advertising contributes to profitable, sustainable growth.
So when you’re reviewing your Amazon Ads dashboard, don’t stop with ACOS and ROAS.
Look at:
- Impressions
- Click-through rate (CTR)
- Cost per click (CPC)
- Conversion rate
- Spend
- Sales
- Search-term performance
- New-to-brand customers, where available
- Impression share, where available
- Profit and break-even economics
When you understand how these metrics interact, you can move beyond simply asking whether your campaigns are performing.
You can start understanding why they’re performing—and what you can do to improve them.
And that’s ultimately the goal.
Don’t optimize the metric. Optimize the business.
That’s how you make each click count.
Frequently Asked Questions
- What Amazon Ads metrics should I track besides ACOS and ROAS?
Beyond ACOS and ROAS, Amazon sellers should monitor conversion rate, click-through rate (CTR), cost per click (CPC), search-term performance, new-to-brand customers, impression share where available, and ultimately profit. Looking at these metrics together helps identify why a campaign is performing the way it is rather than simply showing you the final result.
- Why is Amazon Ads conversion rate important?
Conversion rate shows the percentage of shoppers who click your ad and ultimately purchase. A low conversion rate can indicate issues with targeting, pricing, reviews, product-market fit, or your Amazon product listing. It helps determine whether the traffic you’re paying for is actually turning into customers.
- What does CTR tell you about Amazon advertising performance?
Click-through rate (CTR) measures how often shoppers click your ad after seeing it. A high number of impressions combined with a low CTR can indicate that your ad isn’t compelling or relevant enough to generate clicks. CTR is particularly useful for evaluating how effectively your advertising attracts shopper attention.
- Why should Amazon sellers monitor CPC?
Cost per click (CPC) tells you how much you’re paying, on average, for each advertising click. Rising CPC can increase the cost of acquiring customers, even if your conversion rate remains unchanged. Monitoring CPC alongside conversion rate and profit helps determine whether you’re paying a sustainable price for traffic.
- How important is search-term performance in Amazon PPC?
Search-term performance is critical because campaign-level metrics can hide significant differences between individual searches. Some search terms may generate highly profitable sales while others consume advertising budget without converting. Analyzing search terms helps identify where to increase investment and where to reduce wasted spend.
- Is a low ACOS always good for an Amazon campaign?
No. A low ACOS isn’t automatically a sign of a successful campaign. Reducing advertising spend can lower ACOS while also reducing sales, visibility, or customer acquisition. Your target ACOS should be evaluated against your profit margins, business objectives, and break-even ACOS rather than treated as a universal benchmark.
- What is the most important Amazon Ads metric to track?
There isn’t one metric that tells the entire story, but profitability should ultimately guide your advertising decisions. ACOS, ROAS, CTR, CPC, conversion rate, search-term performance, and other metrics help explain what’s happening inside your campaigns. The goal is to use those metrics together to generate profitable, sustainable growth—not simply to achieve a particular advertising ratio.
Need Help with Amazon Ads? If you’re looking to maximize your Amazon ad returns, sometimes you need an expert who’s been there, done that. I’m Andy Splichal, author of Make Each Click Count and host of the Make Each Click Count podcast. Amazon’s PPC landscape can be overwhelming, but with the right guidance, you can make every dollar count, I’m here to help. Let’s make those clicks count!
ABOUT THE AUTHOR
Andy Splichal is the founder and managing partner of True Online Presence, author of the Make Each Click Count book series, host of the Make Each Click Count podcast, founder of Make Each Click Count University and certified online marketing strategist with twenty plus years of experience helping companies increase their online presence and profitable revenues.
He was named to Best of Los Angeles Awards’ Most Fascinating 100 List in both 2020 and 2021. To find more information on Andy Splichal, visit trueonlinepresence.com or read The Full Story on his website or his blog, blog.trueonlinepresence.com.
