IWS > Internet Coaching > Internet
Free Advertising Advice from the Ad Agencies
by Enrique De
Incredible but true. The only
industry in America that doesn’t believe in advertising is
the advertising industry itself. Because they hardly do any
advertising. And certainly nothing like the huge volume of
advertising they convince their clients to spend.
Virtually every large company spends anywhere from 2% to 16% of
its sales on advertising. That is, every large company except
Omnicom, WPP, Interpublic and Publicis, the Big Four in
Advertising is the communications backbone of business. Look at
the 100 leading national advertisers as reported in the June 27
issue of Advertising Age. All together, these 100 companies spent
$93.3 billion on advertising last year.
The bulk of this money flowed through the four advertising
conglomerates. (Ad Age reports that the Big Four account for 57%
of U.S. advertising volume and this percentage is bound to be
higher for the large companies on the top 100 list.)
Depending on the type of industry, the percentage of sales spent
on advertising by the top 100 companies varies widely depending
on product category. Here are some figures:
- Automotive: 3.1%
- Beer, wine & liquor:
- Computers & software:
- Cosmetics & personal care:
- Drugs: 8.9%
- Fast-food restaurants:
- Food: 5%
- Retail: 2.1%
- Soft drinks: 7.2%
- Telecom: 3.7%
Researching a bit, we find that
advertising agencies believe in publicity, and public relations.
They bombard Advertising Age, Adweek, The New York Times, The
Wall Street Journal, USA Today and other publications with press
releases about their latest campaigns.
They also believe in winning advertising awards. Awards generate
publicity and publicity generates clients. They create intense
interest in awards and other media events. But take a look at the
ads in TV, magazines, newspapers, and radio. Except for a few
classified “help wanted” ads, there is hardly a
single advertisement from an advertising agency.
I find it funny. They sell advertising to others, but they
don’t buy advertising for themselves. Ad agencies have no
trouble recommending big advertising budgets for other firms, but
don't take this medicine themselves.
One could think that maybe the big ad agencies can’t
afford to advertise. But if you look at the 2004 revenues of the
Big Four, you will find that this is not the case. Here are the
- Omnicom: $9.7
- WPP: $8.2 billion
- Interpublic: $5.9
- Publicis: $5.2
That’s revenue, not
billings. If the Big Four reported billings, the traditional way
it was done, the numbers would be much higher. With revenues of
$9.7 billion, Omnicom is No. 230 on Fortune’s list of 500
largest U.S. companies. In terms of sales, Omnicom is larger than
Kellogg, H.J. Heinz, Apple Computer, Campbell Soup, Southwest
Airlines and many other companies that do spend a lot of money on
Take this non verbal advice from the ad agencies: spend a large
part of your advertising budget on public relations and
publicity, send lots of press releases to the media, and don't go
broke advertising above your industry averages.
Read more at our Press Release Coaching section.
About the Author:
Enrique de Argaez is the webmaster of several
multilingual Internet websites and author of four newsletters. He
is active in Internet World Marketing, and Internet Market
Research. Visit his main websites at www.internetworldstats.com and www.allaboutmarketresearch.com.