2003 Best Practices Study

Analysis of Agencies with Revenues Greater Than $10,000,000

EXPENSE ANALYSIS (as % of Net Revenues)

Average

+25% Profit

+25% Growth

Compensation Expense Total Payroll

56.7%

51.9%

58.3%

Benefits

9.4%

6.8%

8.9%

Total Compensation

66.0%

58.7%

67.2%

Selling Expenses

T & E/Conventions

2.3% 0.9% 0.8% 4.0% 3.7% 1.0% 0.6% 1.2% 0.8% 0.3% 1.5% 1.2% 0.7% 0.2% 0.8% 1.1% 0.4% 0.4% 1.1% 1.8% 0.1% 0.6% 0.9% 4.5%

1.9% 0.9% 1.0% 3.8% 3.7% 0.7% 0.6% 0.9% 0.6% 0.4% 1.4% 1.5% 0.9% 0.1% 0.6% 0.8% 0.3% 0.5% 1.2% 1.1% 0.1% 0.6% 1.2% 4.1%

2.7% 0.8% 1.0% 4.5% 3.3% 1.3% 0.6% 1.1% 0.9% 0.2% 1.6% 1.2% 0.7% 0.3% 0.9% 0.8% 0.5% 0.5% 0.7% 2.0% 0.1% 0.3% 0.0% 3.1%

Automobile

Advertising/Promotions

Total Selling

Operating Expenses Occupancy

Telephone

Postage

Supplies/Printing

Dues/Subscriptions/Contributions

Taxes/Licenses

Insurance

Professional Fees Equip Rental/Maint

Bad Debts

Outside Services Data Processing Education/Training

Miscellaneous

Total Operating

13.9%

12.9%

13.9%

Administrative Expenses Amortization

Depreciation Officer Life

Interest

Other

Total Administrative

Total Expenses Pre-Tax Profit

88.4% 11.6%

79.5% 20.5%

88.7% 11.3%

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% % Net Revenue

Compensation

Selling

Operating

Adminstrative

Average +25% Profit

+25% Growth

Information Technology Expense (as % of Net Revenues)

Average

+25% Profit

+25% Growth

Total IT Expense for Fiscal Yr (1)

2.1%

1.5%

1.8%

(1) Includes hardware/software leasing, supplies, maintenance & maintenance contracts, training, data communications, website development/maintenance, computer depreciation, and software amortization

Page 85 2003 Best Practices Study