Pharmaceutical companies and their parent industry of chemical manufacturing claimed the biggest tax deductions for advertising in 2008, but mining and utilities got much more bang for their buck. Ad Age looked at recently released IRS data on corporate filings and found the industries taking the biggest deductions and those spending the smallest portion of their profits on ad-related expenses.
Overall, companies claimed just under $10 of net income for every $1 of advertising expense. Mining spent only $274 million but profited $64.1 billion. Utilities spent just $5 million for its $942 million in profit. The "ad to income" index shows the relative bang for buck each industry got, compared to the national average.
Not surprisingly, more competitive industries spent a larger portion on advertising including food, telecom, publishing and media, and the beverage and tobacco industries.
Here are the top 25 industries.
|Top 25 Industries (ranked by 2008 advertising expense)|
|Industry||Number of returns||Advertising Expense||Net Income (thousands)||Ad to Income Index|
|Chemicals (including pharmaceuticals)||5,722||22 ,220,295||91,635,015||43|
|Telecommunications (including cellular, cable, etc.)||8,794||8,022,079||28,842,822||37|
|Publishing industries (except Internet)||13,064||6,983,295||30,736,683||46|
|Beverage and tobacco products||817||6,795,675||21,604,735||33|
|Professional, scientific, and technical services||527,611||6,773,757||78,886,735||121|
|Computer and electronic product manufacturing||7,156||6,591,056||62,730,736||99|
|General merchandise stores||4,379||6,362,362||22 ,481,932||37|
|Insurance carriers and related activities||83,858||5,544,689||73,062,067||137|
|Food services and drinking places||118,204||5,259,222||15,406,423||30|
|Motor vehicle dealers and parts dealers||42,454||4,168,781||8,035,968||20|
|Broadcasting (except Internet)||2,097||3,381,215||10,132,136||31|
|Administrative and support services||158,334||3,128,978||20,117,585||67|
|Motion picture and sound recording industries||14,863||3,077,576||5,920,287||20|
|Electrical equipment, appliance, and components||3,752||2,980,603||20,976,316||73|
|Clothing and clothing accessories stores||26,037||2,902,409||8,189,004||29|
|Building material and garden supply dealers||22 ,726||2,685,627||10,235,317||40|
|Food, beverage and liquor stores||53,514||2,377,654||9,450,753||41|
|Source: Internal Revenue Service 2008 corporate filings|