2002 Best Practices Study

Analysis of Agencies with Revenues Between $1,250,000 and $2,500,000

EXPENSE ANALYSIS (as % of Net Revenues)

Average

+25% Profit

+25% Growth

Compensation Expense Total Payroll

51.1%

39.5%

50.5%

Benefits

7.9%

7.1%

7.3%

Total Compensation

59.0%

46.6%

57.9%

Selling Expenses

T & E/Conventions

1.1% 1.1% 1.7% 3.9% 4.4% 1.4% 0.7% 1.2% 1.0% 0.4% 1.4% 0.7% 0.7% 0.2% 0.7% 1.2% 0.4% 0.6% 0.8% 1.6% 0.4% 0.7% 1.4% 4.8% 14.9% 82.6% 17.4%

1.3% 1.0% 2.0% 4.3% 4.2% 1.5% 0.6% 1.2% 0.7% 0.2% 1.2% 1.0% 0.5% 0.2% 0.4% 0.9% 0.2% 0.2% 0.1% 1.0% 0.5% 0.2% 0.8% 2.7% 13.2% 66.8% 33.2%

1.0% 1.3% 1.3% 3.5% 4.3% 1.3% 0.7% 1.3% 0.6% 0.2% 1.1% 0.8% 0.8% 0.2% 0.4% 1.3% 0.2% 0.8% 0.3% 1.1% 0.3% 0.4% 0.7% 2.9% 14.0% 78.2% 21.8%

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

Administrative Expenses Amortization

Depreciation Officer Life

Interest

Other

Total Administrative

Total Expenses Pre-Tax Profit

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% % 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)

1.8%

1.2%

1.6%

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

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