Measuring Marketing

Chapter 55 Advertising-To-Sales Ratio

Measurement Need

Determining the return on the various programs marketing implements.

Solution

The advertising-to-sales ratioi describes the effect of advertising on a company’s total sales. The formula is:

$ASR=\frac{E_a}{S_t}$

Where

ASR = advertising-to-sales ratio

Ea = total advertising expenditures

St = total sales during time t

To illustrate:

Nikeii spent US$3.2 billion in advertising in 2016, with total global sales of $32.4 billion, so its advertising-to-sales ratio was:

$\begin{array}{l}\frac{\$3,200,000,000}{\$32,400,000,000}\\ =9.9\%\end{array}$

Impact

Measuring how effective the advertising campaigns are at creating sales is a vital piece of information that marketers supply to support their marketing efforts. ...