One of the most commonly-asked questions we get at the 60 Second Marketer is about advertising-to-sales ratios. It seems that marketers from companies both large and small are always interested in knowing what percentage of their sales revenue should be allocated to advertising.

The answer varies dramatically by industry. Some industries, like the beverage industry, are very high. Other industries, like grocery stores, are very low.

Not long ago, the 60 Second Marketer team did a little homework and developed a snapshot of what a variety of industries typically spend on advertising as a percentage of their overall revenue. Here’s what we found:

• Amusement Parks: 9.5%
• Beverages: 9.1%
• Cigarettes: 4.2%
• Liquor: 15.6%
• Restaurants: 3.5%
• Furniture Stores: 6.3%
• Grocery Stores: 0.9%
• Hotels and Motels: 2.3%
• Jewelry Stores: 5.4%
• Soaps and Detergents: 11.7%

The highest advertising spend in our review was for liquor at 15.6%.  On the other end of the spectrum, several business-to-business industries had advertising-to-sales ratios of below 0.5%.

These are just general guidelines and should be used as such.  But they give you a relatively good idea of how much different industries spend on advertising as a percentage of sales.

Tuesday, March 17th, 2009, 3:07 pm   |   Advertising  |  RSS feed |  Respond  |  Trackback