ADVERTISING-TO-SALES RATIO
An advertising campaign's measurement of effectiveness. It is calculated by dividing the total advertising expense by its sales revenue. The advertising-to-sales ratio is created to reflect whether the firm's resources that was doled out for an advertising campaign had assisted in generating new sales. A high advertising-to-sales ratio connotes that the generated revenue was low despite the high advertising expense; it may mean that the campaign is unsuccessful. One the other hand, a low ratio may indicate the success of the campaign.
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