The formula to calculate the Advertising Cost of Sales (ACOS) is:
\[ \text{ACOS} = \left(\frac{\text{AS}}{\text{AR}}\right) \times 100 \]
Where:
Advertising Cost of Sales (ACOS) is a metric used to measure the efficiency of advertising spend. It is calculated by dividing the ad spend by the ad revenue, then multiplying by 100 to get a percentage. A lower ACOS indicates a more efficient advertising campaign, as it means less money is spent on advertising for each dollar of revenue generated.
Let's consider an example:
Using the formula to calculate the Advertising Cost of Sales:
\[ \text{ACOS} = \left(\frac{500}{2000}\right) \times 100 = 25\% \]
This means that the Advertising Cost of Sales (ACOS) is 25%.
