2020 Ad-to-Sales Ratio Benchmarks
The study reports fiscal 2019 and 2020 advertising spending as well as revenue reported for 2020, advertising-
Advertising by catalog and mail-order houses, the top spending industry, increased to over $27 billion and the industry saw an increase of 33% in revenue. Online powerhouse Amazon continued to grow its advertising budget by over 16 percent. JD.com, a major Chinese retailer as well as internet company, increased ad spending over 30 percent.
The pharmaceutical industry reported spending exceeding $15 billion in 2020, up 7% from 2019. The biotech industry with its involvement in personalized medicine grew its advertising spending by 15% to over $2 billion. As in other industries, use of social media has become integral to the marketing strategies of pharmaceutical companies.
Motor vehicle manufacturers decreased their ad budgets over 16% and reported revenues down by 8%. Cable and pay TV services, such as Comcast, reduced their ad spending by 4% to $12.6 billion.
Large, diversified food companies spent a total of $2.2 billion in 2020, up over 15 percent from 2019. Since most activities outside the home came to a halt during 2020, the beverage industry spent $7.8 billion, an 11% decrease, and saw flat sales. Beer companies spent almost $1.2 billion, a 16% decrease. The 42 separate restaurant chains in the study spent a total of $3.2 billion in 2020, a decrease of a little over 1% from 2019 and saw a 10% decrease in sales.
Variety stores, led by Wal-Mart, decreased their ad budgets over 10% for a total of just over $5 billion. However, due to nimble implementation of contact free shopping, revenues increased by 9%. Traditional bricks and mortar department stores, such as Macy's, saw decreasing sales of more than 20%. Not surprisingly, travel related industries saw significant revenue losses in 2020 and decreased advertising spending.
Advertising Ratios & Budgets is widely used for strategic planning by ad agencies, monitoring competitors, planning ad budgets, and identifying new business prospects. Information is grouped to show all competitors within an industry.
Copies of the 124-page study are available in PDF format for $ 395. Data files from Advertising Ratios & Budgets are also available for all companies and industries in Excel format. Five years of revenue, ad spending and ratio information is provided within the datafiles to allow for additional analysis. The 2021 edition of the PDF study along with Excel datafiles is $ 495. Contact Schonfeld & Associates, Inc., 1932 Terramar Lane, Virginia Beach, VA 23456. 800-205-0030. Visit www.saiBooks.com under the Area of Expertise: Advertising Spending.
Carol J Greenhut