How much should sales commissions run as a percentage of your gross sign revenues? Frank Rolfe in Big Bucks from Big Signs estimates that agency commissions are normally 16.6% of gross revenue. Paul and Jeffery Wright in Billboard Appraisal say that 15-17.5% of gross revenue is normal for ad agencies but that the number may be 10-15% of gross revenue in major metro markets which higher dollar values are involved. By the way, I highly recommend those books to anyone new to the business. You can buy Frank’s book at the outdoorbillboards.com website. You can buy the Wright’s book from the Signvalue website.

If you have your own in house sales force you can probably use a mix of base plus commission which will lower your sales costs closer to 10%.

The three public outdoor companies lump sales costs together general and administrative expense. SG&A expenses, however, average 17% at the three public outdoor companies which suggests to me that they are keeping sales commissions at 10-15% of gross revenue. Here are SG&A expenses as a % of gross revenues for the three public outdoor companies for the quarter ended June 2015:

Company SG&A Expenses as % of Revenue

Outfront 16.6%

Lamar 17.4%

Clear Channel 18.3%