The problem with “just cut bids”
High ACOS is not the problem. High ACOS with no learning is.
When spend rises and sales flatline, most sellers pause keywords or drop bids fast. Sometimes that helps; more often it kills sales velocity, which hurts organic rank and makes your account even harder to scale.
The goal isn’t “lowest ACOS.” The goal is predictable profitability and controlled growth. This framework shows how to reduce ACOS without choking performance.
ACOS vs TACOS (what your business actually cares about)
ACOS measures efficiency inside ads (Spend ÷ Ad Sales). TACOS measures efficiency of the whole business (Spend ÷ Total Sales).
You can have high ACOS and still be okay if ads lift organic rank or protect your branded shelf. You can also have “good ACOS” and a rising TACOS if organic drops and ads are carrying the store.
The real levers behind ACOS
ACOS is a result of three levers: CPC (cost per click), CVR (conversion rate), and AOV (average order value / price).
Most “optimizations” only touch CPC. The fastest path is to sequence work: economics → conversion → targeting → bidding.
- If CPC is too high: structure/overlap/placements/relevance are usually broken.
- If CVR is low: your listing/offer is the bottleneck (fix first).
- If AOV is low: bundles, pricing strategy, and variation routing become critical.
Step-by-step fix framework
1) Set break-even ACOS so you stop guessing. 2) Run an 80/20 waste hunt. 3) Fix conversion before cutting traffic. 4) Separate efficiency vs exploration. 5) Use negative funnels to prevent overlap. 6) Bid with guardrails. 7) Validate placements.
The negative funnel (the simplest high-impact move)
Discovery campaigns (Auto/Broad) should find terms. Exact campaigns should scale them.
When a term converts, move it into Exact and add it as a negative exact in discovery. Now you stop paying twice and performance compounds.
Summary
Lowering ACOS without killing sales is mostly about building control: a clean structure, a repeatable harvest loop, and small bid changes backed by conversion improvements.