A campaign average can look acceptable while one search term consumes most of the spend at a much weaker return. This worked example shows how to move from a campaign-level ACOS to a more useful search-term review.
All figures below are invented for illustration. They are not customer results, a performance promise or a screenshot of the paid workbook.
The example: 27.3% campaign ACOS hides a 60% search term
Assume two relevant search terms advertise the same product over the same reporting period. For illustration, the seller has already worked out that a 30% target ACOS fits that product's economics. This is an example target, not a universal recommendation.
| Metric | Term A | Term B | Combined |
|---|---|---|---|
| Impressions | 4,000 | 6,000 | 10,000 |
| Clicks | 40 | 60 | 100 |
| Ad spend | £30 | £45 | £75 |
| Orders | 8 | 3 | 11 |
| Attributed sales | £200 | £75 | £275 |
| CTR | 1.0% | 1.0% | 1.0% |
| CPC | £0.75 | £0.75 | £0.75 |
| Orders / clicks | 20.0% | 5.0% | 11.0% |
| ACOS | 15.0% | 60.0% | 27.3% |
| ROAS | 6.67× | 1.67× | 3.67× |
The combined ACOS is £75 divided by £275, or 27.3%. It is not the simple average of 15% and 60%. Looking only at the combined number would miss how differently the two terms perform.
Step 1: check the product's advertising limit
Before interpreting either row, calculate how much contribution remains after the costs of making a sale and before advertising. A target that works for one product can be unsuitable for another.
Calculate your own break-even and target ACOS with the free calculator. Use a consistent revenue and cost basis, and verify fees and tax treatment for your business.
Step 2: separate traffic cost from conversion
Both terms have the same CTR and CPC. Term B's weaker return is therefore not explained by a higher average cost per click in this example. The recorded orders-to-clicks ratio differs: 20% for A versus 5% for B.
That does not establish the cause. Review customer intent, placement, the product page, availability and conversion lag. These are limited samples, not proof that the same rates will persist.
Step 3: make a review list, not automatic bid changes
Term A: a candidate for a measured scaling review, because it has repeat orders and ACOS below the illustrative target. Check whether budget is genuinely constraining it and whether more traffic is available before changing anything. More spend does not guarantee the same return.
Term B: investigate first. It has produced orders, so an automatic negative would also remove traffic that has converted. Check whether the result persists after attribution has matured and whether the issue is relevance, placement or conversion. A controlled bid reduction may be appropriate if the economics remain weak.
A single query may be reached through several targets or ad groups. Keep that context when deciding where to make a change. For the broader framework, read what to scale, reduce or negate.
Step 4: handle zero-sales and low-data rows correctly
With spend but no attributed sales, ACOS cannot be calculated by ordinary division; it is not 0%. ROAS is 0 when spend is positive and sales are zero. With no clicks, an orders-to-clicks conversion rate is unavailable. Flag these situations rather than treating missing ratios as excellent performance.
Set evidence thresholds that fit your product and review period. Very little data is a reason to collect more evidence, not a reliable reason to block an otherwise relevant term.
Use the same process on your own export
Start free: get the PPC Quick Audit Checklist to structure the review.
Repeat the calculation in Excel: the Amazon PPC Search-Term Optimiser provides calculated metrics and editable review thresholds for up to 100 pasted rows per working area. It is a downloadable workbook, not an Amazon account connection or automated bidding service. Suggested categories depend on the settings you choose; the judgements above explain the example rather than reproduce exact workbook output.
Definitions and sources
ACOS = ad spend ÷ attributed sales × 100. ROAS = attributed sales ÷ ad spend. CTR = clicks ÷ impressions × 100. CPC = spend ÷ clicks. The conversion ratio used here is orders ÷ clicks × 100.
See Amazon Ads' ACOS and ROAS definitions and Sponsored Products search-term report guidance. That report includes terms with at least one ad click, so its impressions may not match campaign-level impressions.
CalcCommerce is independent and is not affiliated with or endorsed by Amazon. Examples and tools support business planning; they do not guarantee sales, profit or advertising results.