WHAT'S A GOOD RATIO OF ADVERTISING TO REVENUE FOR A TARGET BUSINESS?
What's a good ratio of advertising spending to gross revenue for a target business?
I am looking at a specialty manufacturing business that is a near-monopoly in its narrow but widening niche. It spends little on advertising, but still generates most of its revenue from a steady stream of new customers -- not from returning clients. There is nonetheless a sizable backlog of orders.
I am trying to quantify whether the circumstances warrant overlooking the lack of recurring customers. If you think there is another metric that would better round out the picture, I'd be pleased to learn about that as well.