At Pentane, an Advertising Expense is one that can be increased or decreased within 24hrs. This short timeline is important as it creates clarity around how to control the growth & scale within a business (i.e. How can we pour more fuel on the fire?)
We look at Advertising Expenses a bit differently within Pentane. Yes, these are sales related expenses so considered variable from an accounting standpoint, but we find that advertising/marketing expenses that can be changed quickly are more impactful to leverage separately.
Examples of these advertising expenses are:
- Twitter (X)
- TikTok
- Snapchat
While other marketing expenses are certainly considered “advertising”, the Pentane system looks at ad expenses that we cannot increase or decrease quickly as variable expenses, instead of classifying them as “advertising expenses”.
Examples of these types of expenses, which we’ll classify as variable, not advertising, are:
- Influencers (typically planned out, can’t be increased within 24 hrs)
- Affiliate programs
- Marketing agency fees
- Bus benches
- Urinal cakes (yep, urinal cakes)
- Billboards