Reference library · Inventory pricing
TAC (Traffic Acquisition Cost)
TAC (Traffic Acquisition Cost) is the amount a buyer pays a third party to acquire the traffic or supply underlying a deal, whether that is a media buy, a revenue share, or a licensing fee owed to the source. A buyer strips TAC out of gross revenue to see the actual margin earned on that traffic, not just the top-line billing. It applies wherever inventory or audience is bought from one party and monetized through another.
Formula
Worked example
A Polish publisher buys 500,000 clicks from a traffic network at €0.08 CPC, for a TAC of €40,000. Those clicks generate €58,000 in display and native ad revenue on the landing pages. Net revenue is €58,000 - €40,000 = €18,000, a margin of 31%. A rival deal billing €90,000 gross but carrying €75,000 TAC nets only €15,000, a worse outcome despite the larger headline number.
How it is used
TAC is used to rank deals by margin rather than by gross billing, and to set a floor CPC or revenue-share rate above which a traffic source stops being worth using. It is tracked deal by deal because TAC rates shift with seasonality and competition in the traffic source's own auction. The recurring mistake is booking only the raw media spend as TAC and leaving out agency commissions, revenue-share tiers, or platform fees paid to the same source, which understates true cost and overstates margin.
The common mistake
Compare deals on margin after TAC, not on gross revenue, since a high-revenue deal with heavy TAC can net less than a smaller one.