TACOS is basically all your ad spends as a percentage of revenue. The revenue includes both ads revenue and organic revenue. But more often than not, most Amazon teams focus only on ad revenue and ad spends, forgetting the most important part-organic revenue
Very few brands would even be measuring what their organic revenue is on the platform at a keyword level.
It is extremely important to take all steps that will increase organic visibility and organic sales in the platform. In fact, Amazon Pi Search Performance report gives you the SOV that you have at a keyword level for SP ads, SB ads as well as organic
The lead indicator of profitability in the platform are mainly 2 things
a) Increase in organic SOV in all generic keywords
b) Increase in branded searches
Increase in branded searches is more often than not decided by what you do outside the platform. Executing good campaigns on ATL and really good clutter breaking Meta performance campaigns often does the trick here
But increasing organic SOV in generic keywords is often a result of what happens on the platform.
In Amazon, whatever you do on ads also directly influences organic results. Eg. If you bid and rank top of Search on SP ads for certain keywords and your conversion rates are better than the category on those keywords, Amazon will also start ranking you on top organically for those keywords
That is why I have often told that Amazon is a compounding channel and can be run profitably at scale because it rewards good performance with better organic visibility.
Because of this, if you could have organic sales and directionally estimate TACOS ( not ACOS) at a keyword level, you could make a lot of optimizations on your ads as well as overall content which would benefit the business
Eg: Lets say “mixer grinder 750 watt” is a keyword that I am spending money on ads. I know the ad spends, ACOS and ad driven sales on this keyword. But not how many organic sales I am getting from that keyword and is that improving with time. And since I don’t know the organic sales, I also would not know TACOS for the keyword
Ideally I would want both organic SOV as well as organic sales increase for this keyword. Without it, profitability would be very difficult.
Amazon doesn’t expose true organic-sales revenue at the keyword level, so any TACoS by keyword metric has to be derived
The rest of the post is there in the link in the first comment. Do read and share how you do keyword level tracking of organic sales and keyword level TACOS and how you use the results
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