Cost accounting (AdWords)

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How much to budget for an AdWords conversion? How about yield? And how much commission would I be willing to pay for a conversion (where relevant)? Just read on.

Aquisition & advertisement costs of sales

Usual costs for acquisition and advertisement (ACoS - Advertisement Cost of Sales), differ widely between branches. Some examples:

  • Retail at a prime location: Advertisement budget should be about 5% of revenue
  • Retail at a non-prime location: Advertisement budget should be about 10% of revenue
  • Acquisition for a non-need-to-have service (e.g., business consultancy): 50% of revenue, is not uncommon
  • Lawyers: ACoS is about 25% of revenue
  • Online vs. offline: ACoS for online businesses, tend to be double the ACoS of offline businesses.