Streams progressively — you don’t need to wait for the whole file. You can also download it to listen offline.
A $20 product and a $100 product can both reach 5% TACOS. What they cannot do is get there the same way — because buying a customer costs about the same for both of them.
This episode works through what a sale from advertising actually costs, turns that into TACOS, and then asks the question the benchmark hides: at your price, how many of your customers have to find you on their own before the numbers close? Along the way it covers why a benchmark is not a target, why Amazon takes a smaller cut as the price rises, and how anyone sells cheap products profitably at all.
What it costs to acquire a customer barely moves with your price. Everything else about your advertising — what you can bid, what TACOS you can reach, how much organic you need underneath it — follows from that one fact.
The written companion
This covers the same ground as one of the written pieces in this section, in conversational form:
- Why a $20 product and a $100 product can’t have the same TACOS — the same argument, written, with the arithmetic set out step by step.
Where to go next
- What ACOS should you actually aim for? — the target your margin can carry, rather than the one in the benchmark.
- The five margins of a product — which one advertising is really spending.
- Why your real margin is lower than the one you calculated — the number underneath all of this, and why it drifts.