Advertising expenditure It is generally estimated that developed economies spend more than 2 percent of their GNPs on advertising(see Schmalensee 1972, 1986) The expenditure of firms on advertising is generally measured in terms of advertising expenditure divided by the value of sales. These ratios vary drastically across products and industries. The ratio of advertising expenditure to sales varies a lot across industries and firmsAdvertising Expenditure • It is generally estimated that developed economies spend more than 2 percent of their GNPs on advertising (see Schmalensee 1972, 1986). • The expenditure of firms on advertising is generally measured in terms of advertising expenditure divided by the value of sales. These ratios vary drastically across products and industries. The ratio of advertising expenditure to sales varies a lot across industries and firms