The target cost will vary depending on various conditions, but you can create a target cost per conversion that suits your company by following the two steps below. Calculate the advertising ratio of sales of similar companies Calculate backwards from your sales A good way to determine the advertising ratio of sales of similar companies is to analyze survey data on advertising expenses . For example, Toyo Keizai Online lists the advertising-to-sales ratio for each company. By comparing similar companies to yours and checking the average, you can determine the approximate appropriate advertising-to-sales ratio.
Ranking of "200 companies with the highest advertising canada telegram phone number list and promotional expenses as a percentage of sales" Source: Ranking of the 200 companies with the highest advertising and promotional expenses as a percentage of sales | Toyo Keizai Online Once you know the above, you can calculate your advertising budget from your company's target sales, and then divide it by your target number of conversions to calculate your approximate cost per conversion . What is the target cost per conversion for listing ads? The target cost per acquisition (Target CPA) for listing ads is the maximum advertising cost you can afford to pay to acquire one conversion .
By setting this, the bid price for ads will be automatically adjusted, enabling efficient advertising operations. When setting a target conversion cost, it is important to first consider the profit margin. If you have past performance data, set a target value within a achievable range. For example, if your average cost per conversion over the past three months was $20,000, you can use that figure as your target cost per conversion. The criteria for setting the target conversion cost are as follows: For high-priced items with low sales: Set the target cost per conversion based on the profit (gross profit) you can earn from one conversion.