Who Advertises? Companies plow 2.5 percent of their revenues into advertising. Actual advertising-to-sales ratios vary from industry to industry, and even within the same business. The latest information, released by Schonfeld & Associates, grabs from approximately 6,000 SEC filings. The report contains lots of numbers; it must be used with care. Companies appoint themselves into industry groups, and each can claim allegiance to only one industry. For example, Johnson & Johnson is a pharmaceutical company, although much of its advertising arises in support of cosmetic and other personal-care products. The largest ad category, autos, devotes only 2.7 percent of its revenues to advertising. Do ad companies advertise? There is a category called “advertising agencies”; it includes only one company, Greenstone Roberts, which, by the way, spent 1.2 percent of revenues on advertising. Interpublic, Omnicom, True North and the rest never touch the stuff. –Alan Gottesman (westendal pobox.com) is principal of West End Consulting.
THE GOTTESMAN FILE
Industries with the largest ratio of advertising to sales include:
Dolls, stuffed toys
Watches, clocks, parts
Cutlery, hand tools, general hardware
Source: Schonfeld & Associates