Benchmark: print advertising costs.Is there an industry-wide standard for advertising spending? Answering this question has always been like nailing jello to a wall, but--at long last--we've uncovered Uncovered may refer to:
Our source is Adscope's "1993 Ad Spending Report on Computer Software," a detailed tally of print advertising placements by 1373 software companies in 231 different business, consumer, and trade magazines. In total, Adscope kept track of 56,010 software ads during calendar 1993, representing about $450 million in spending. (To adjust for agency and multiple-insertion discounts, Adscope estimates the cost of each ad placement at 70% of the one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. rate.) Adscope probably missed a few ads here and there, of course, but this is by far the most comprehensive advertising database we've we've Contraction of we have. we've have ever seen. What Adscope doesn't does·n't Contraction of does not. supply is any kind of financial ratios for advertising expenditures. To calculate spending ratios, we compared Adscope's data on ad spending to domestic revenues of this year's Soft*letter 100 companies. (Since Adscope only surveys U.S. publications, we excluded international Soft*letter 100 revenues.) Adscope's data covers 84 current Soft-letter 100 companies, ranging in size from Microsoft (Microsoft Corporation, Redmond, WA, www.microsoft.com) The most successful and influential software company. Microsoft's software and Intel's hardware pioneered the PC and revolutionized the computer industry. ($1.8 billion in domestic revenues) to Microway Microway is a high end computer manufacturer making servers and clustering products. The company was founded in 1982 to write software to support the Intel 8087. Soon thereafter, Microway began to manufacture hardware add-ons for X86 based computers for use by scientists and ($2.4 million in domestic revenues). And so we get to the magic benchmark: Based on Adscope's numbers, the typical software company spends 1.7% (median) of its domestic revenues on print advertising. But is this really a useful number? Probably not. Ideally, a benchmark should point to some consensus about "best practices," but it's it's 1. Contraction of it is. 2. Contraction of it has. See Usage Note at its. it's it is or it has it's be ~have clear that software companies have been successful with very different levels of print advertising spending in their overall marketing mix. There are companies in Adscope's database that invest more than 10% of revenues in advertising; there are others that invest virtually nothing but still manage to dominate their markets. Still, we did find one correlation correlation In statistics, the degree of association between two random variables. The correlation between the graphs of two data sets is the degree to which they resemble each other. that's especially revealing: a link between advertising spending ratios and product prices. Using Soft*letter 100 data on suggested retail prices of flagship This article is about the lead ship, store, or product of a group. For other uses, see Flagship (disambiguation). A flagship is the ship used by the commanding officer of a group of naval ships. titles, we grouped companies in our database into three broad market segments--consumer (under $150), mainstream business ($150-$500), and high-end high-end adj. Informal 1. Appealing to sophisticated and discerning customers: a high-end department store; high-end video equipment. 2. (above $500)--and then compared their advertising spending levels. Based on these categories, consumer-oriented companies emerge as the champion penny-pinchers, with a median spending level for print advertising of just 0.7% of domestic revenues. (In general, consumer companies seem to spend more of their dollars on packaging and in-store merchandising merchandising Element of marketing concerned especially with the sale of goods and services to customers. One aspect of merchandising is advertising, which aims to capture the interest of the segment of the population most likely to buy the product. .) By comparison, the mainstream business segment, which is dominated dom·i·nate v. dom·i·nat·ed, dom·i·nat·ing, dom·i·nates v.tr. 1. To control, govern, or rule by superior authority or power: by companies in mature, highly competitive markets, spends a hefty heft·y adj. heft·i·er, heft·i·est 1. Of considerable weight; heavy. 2. Rugged and powerful. See Synonyms at heavy. 3. 3.9% of domestic revenues on advertising. Finally, the high-end segment, made up primarily of vertical-market and niche-specific companies, spends a middle-of-the-road mid·dle-of-the-road adj. 1. Pursuing a course of action midway between extremes, especially following a course in politics that is neither liberal nor conservative. 2. Abbr. 1.8%. These ratios probably aren't aren't Contraction of are not. See Usage Note at ain't. aren't are not aren't be benchmarks in the literal In programming, any data typed in by the programmer that remains unchanged when translated into machine language. Examples are a constant value used for calculation purposes as well as text messages displayed on screen. In the following lines of code, the literals are 1 and VALUE IS ONE. sense--but they do provide a starting point Noun 1. starting point - earliest limiting point terminus a quo commencement, get-go, offset, outset, showtime, starting time, beginning, start, kickoff, first - the time at which something is supposed to begin; "they got an early start"; "she knew from the for comparisons of advertising spending. And we're we're Contraction of we are. we're we are unlikely to see numbers that get any more rigorous than these ratios. For those who'd who'd 1. Contraction of who would. 2. Contraction of who had. who'd short for who would, who should, who had. like to explore the Adscope/Soft*letter 100 ratios in more detail, here are the numbers for individual companies:
1993 Domestic Print Advertising Ratios
U.S. Revenues Ad Spending* Ratio
High-End: Average SRP over $500:
Algor Interactive Systems $5,615,860 $794,533 14.1%
Globalink $4,515,060 $528,189 11.7%
Caere Corp. $22,599,120 $2,519,157 11.1%
Altsys Corporation $6,069,600 $380,299 6.3%
Microway $2,361,600 $132,555 5.6%
Primavera Systems $16,211,840 $844,522 5.2%
Macromedia $18,813,900 $769,970 4.1%
Palindrome Corp. $13,982,740 $469,357 3.4%
MicroBiz Corp. $7,361,000 $230,841 3.1%
Cheyenne Software $44,000,400 $1,330,859 3.0%
Mathsoft $25,871,576 $652,147 2.5%
Aldus Corp. $107,525,600 $2,044,266 1.9%
MapInfo $15,750,000 $268,008 1.7%
SBT Accounting Systems $10,545,000 $174,998 1.7%
Adobe Systems $313,457,000 $3,998,709 1.3%
Autodesk $166,294,360 $1,881,240 1.1%
DataEase International $13,420,000 $143,462 1.1%
Santa Cruz Operation $87,522,000 $868,879 1.0%
Campbell Services $6,818,840 $61,386 0.9%
Novell $610,535,120 $4,830,406 0.8%
Eagle Point Corp. $10,026,300 $70,166 0.7%
Blyth Holdings $10,764,000 $10,449 0.1%
CYMA Systems $3,800,000 $2,790 0.1%
Best Programs $40,710,000 $28,770 0.1%
MEDIAN 1.8%
Mainstream Business: Average SRP $150-$500:
Concentric Data Systems $4,285,344 $413,246 9.6%
Quarterdeck Office Systems $35,059,980 $3,229,011 9.2%
DeltaPoint $4,608,070 $372,708 8.1%
American Small Business
Computer $11,632,250 $864,825 7.4%
Micrografx $28,531,720 $1,877,686 6.6%
Persoft $7,280,000 $466,892 6.4%
Software Publishing Corp. $57,008,700 $3,582,561 6.3%
WordPerfect Corp. $380,700,000 $22,708,808 6.0%
Shapeware $11,601,600 $663,445 5.7%
Lotus Development Corp. $490,600,000 $27,469,429 5.6%
Borland International $234,365,910 $9,755,740 4.2%
FutureSoft $5,224,890 $212,552 4.1%
Traveling Software $15,246,700 $594,258 3.9%
Jandel Scientific $5,763,080 $223,960 3.9%
Q+E Software $11,968,000 $427,074 3.6%
Central Point Software $54,619,110 $1,929,178 3.5%
Walker Richer & Quinn $43,370,571 $1,370,600 3.2%
Dantz Development Corp. $6,486,100 $191,935 3.0%
Symantec Corp. $185,851,020 $4,986,402 2.7%
Data Access Corp. $2,800,000 $59,487 2.1%
Microsoft Corp. $1,849,050,000 $36,822,530 2.0%
Peachtree Software $26,007,300 $481,299 1.9%
CE Software $7,664,800 $121,076 1.6%
Intuit $206,924,850 $2,117,315 1.0%
Datastorm Technologies $25,380,000 $208,251 0.8%
Pinnacle Publishing $5,575,350 $42,297 0.8%
Wall Data $45,248,700 $169,587 0.4%
MEDIAN 3.9%
Consumer: Average SRP under $150:
Now Software $6,931,200 $951,473 13.7%
MicroTac Software $4,502,700 $547,471 12.2%
Insignia Solutions $16,650,000 $817,470 4.9%
Reality Technologies $10,780,000 $523,534 4.9%
MicroHelp $3,883,500 $141,772 3.7%
Touchstone $3,920,000 $140,606 3.6%
Stac Electronics $27,089,040 $632,222 2.3%
XcelleNet $16,530,000 $288,184 1.7%
Sierra On-Line $53,100,000 $868,050 1.6%
Strategic Simulations $9,157,680 $146,964 1.6%
Interplay Productions $37,998,400 $542,967 1.4%
SWFTE International $6,849,375 $97,188 1.4%
Activision $21,220,000 $255,124 1.2%
Banner Blue Software $6,779,520 $58,292 0.9%
Nova Logic $3,952,800 $33,842 0.9%
Velocity Development Co. $5,545,980 $39,362 0.7%
Formgen $6,928,350 $45,126 0.7%
Timberline Software Corp. $17,476,800 $110,693 0.6%
Softdisk Publishing $5,343,730 $33,834 0.6%
Automated Design Systems $3,990,400 $24,402 0.6%
MECC $20,171,150 $122,297 0.6%
Parsons Technology $40,627,620 $236,365 0.6%
Edmark $9,612,100 $48,888 0.5%
Phoenix Technologies $53,874,700 $251,212 0.5%
IMSI $15,621,820 $63,815 0.4%
T/Maker Company $8,312,500 $30,872 0.4%
ON Technology $7,990,000 $25,137 0.3%
Maxis $17,832,060 $47,022 0.3%
Software Toolworks $97,500,000 $218,195 0.2%
Broderbund Software $86,232,600 $161,525 0.2%
Davidson & Associates $57,983,310 $97,454 0.2%
Systems Plus $14,400,000 $18,705 0.1%
Learning Company $30,571,890 $1,435 0.0%
MEDIAN 0.7%
* Source: "Focus on Software: 1993 Ad Spending Report on
Computer Software," Adscope, 355 W. Olive, Sunnyvale, Calif.
94086; 408/245-1155; $289.
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