2002 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

56.6%

51.8%

56.5%

Benefits

9.2%

7.9%

8.4%

Total Compensation

65.9%

59.7%

64.9%

Selling Expenses

T & E/Conventions

2.5% 1.0% 0.9% 4.3% 4.0% 1.1% 0.7% 1.3% 0.8% 0.4% 1.3% 1.2% 0.7% 0.2% 0.7% 1.2% 0.4% 0.5% 1.2% 1.8% 0.2% 0.8% 0.8% 4.8%

1.9% 0.8% 0.7% 3.5% 3.8% 1.0% 0.8% 1.4% 0.6% 0.4% 1.7% 1.1% 1.1% 0.1% 0.9% 0.7% 0.3% 0.5% 1.3% 1.7% 0.3% 1.2% 0.6% 5.0%

2.9% 1.3% 0.7% 4.9% 3.7% 1.1% 0.7% 1.1% 0.8% 0.3% 1.4% 1.8% 0.8% 0.3% 0.9% 1.0% 0.4% 0.6% 0.5% 1.3% 0.2% 0.3% 1.3% 3.7%

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

14.4%

14.3%

14.9%

Administrative Expenses Amortization

Depreciation Officer Life

Interest

Other

Total Administrative

Total Expenses Pre-Tax Profit

89.5% 10.5%

82.5% 17.5%

88.4% 11.6%

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)

2.4%

1.8%

2.0%

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

95