FORGET ABOUT RULES OF THUMB – 3 OBSERVATIONS I remember a retailer asking me what percentage of turnover they should spend on advertising, and I recall thinking just how ridiculous this question was. The answer is so simple – as little as you can get away with, given your objectives! There is a car dealer […]

FORGET ABOUT RULES OF THUMB – 3 OBSERVATIONS I remember a retailer asking me what percentage of turnover they should spend on advertising, and I recall thinking just how ridiculous this question was. The answer is so simple – as little as you can get away with, given your objectives! There is a car dealer in my home town who claims to spend as much on advertising each year as he expects to make in profit. This is his formula. While I understand and appreciate the commitment this reflects, I question the merits of any formula. What if the same results can be achieved for a lesser investment? On the other side of the coin, I was once on a GTE (government trading entity board) when the government of the day demanded a 20% reduction in advertising expenditure. Such instructions, I believe highlight the naivety, if not stupidity, of the…