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Free Advertising Advice from the Ad Agencies

by Enrique De Argaez

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.

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: 8.6%
  • Computers & software: 2.8%
  • Cosmetics & personal care: 16%
  • Drugs: 8.9%
  • Fast-food restaurants: 5.8%
  • 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 figures:

  • Omnicom: $9.7 billion
  • WPP: $8.2 billion
  • Interpublic: $5.9 billion
  • Publicis: $5.2 billion

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 advertising.

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.

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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 and

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