Using information regarding industry advertising-to-sales ratios (see company.news-record.com/advertising/advertising/ratio.html), recommend percentages of sales that advertisers in the following industries should use to set next year’s advertising budget: a grocery store, a physician, a cosmetic brand, and malt beverages.
Using the percent of sales method, an advertiser sets its budget at a certain percentage of current or forecasted sales. However, determining what percentage to use is not always clear. Many marketers look at industry averages and competitor spending for comparisons. Web sites and trade publications, such as Advertising Age, publish data about industry averages and advertising-to-sales ratios for top advertisers.