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Art & Commerce

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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:

Industry
A/S ratio

Dolls, stuffed toys
14.9%

Watches, clocks, parts
14.4%

Personal services
14.2%

Sugar/confectionery products
14.2%

Games, toys
12.8%

Perfumes, cosmetics
11.9%

Books
11.7%

Cutlery, hand tools, general hardware
11.2%

Soaps, detergents
11.2%--

Source: Schonfeld & Associates