TOBACCO PROFITS

Poverty Bay Herald, Volume LV, Issue 17452, 29 December 1930, Page 10

TOBACCO PROFITS

THE TRADE IN AMERICA HOW ADVERTISING pays The American Tobacco Co. increased

its advertising appropriation for 1930 by £460,000 over that of 1929—a rise that may bo estimated at 13 to 13 per rant. —the larger part of which is going into newspaper advertising. s In the first five months of 1930 the company received back a 100 per fent. increase in its net profits after allowing for bond interest and preferred dividends, according to a formal statement by George W. Hill, its president. New York financial editors , immediately figured that the additional profits must have amounted from £2,<450,000 to £3,250,000, and the total net profits for the 1930 period mentioned were £4,500.000 to £5,000,0C0.i On the basis of profits already in band, tho additional investment in advertising might be credited with a net return of 500 per cent. ,

As concrete evidence of the swelling profits, the directors oF the company voted on June 25 Ln submit to the stockholders a plan providing for an extra, cash dividend of four dollars a share, a. stock split-up which would double the number of shares, and Inauguration of dividends at the rate of five- dollars a year on the new stock. The last would bo equivalent- to a rate of ten dollars a year on the present stock, which now pays eight dollars a year., While the. total of the American Tobacco Co.’s advertising appropriation was not announced, it was said on good authority that the amount would be not fax from £3,800,000 or £4.000,000. Newspaper space 'constitutes the largest item in the company’s advertising expenditures.

-Mr. Hill gave credit to,the company’s newspaper advertising in a statement which reporters and financial editors were summoned to hear, following the directors’ meeting. He said: “We sincerey attribute a large measure of the prosperity of our company to the assistance that newspaper advertising lias giveii us. Second only in importance to the quality of the product, in our opinion, is the question of its exploitation by advertising. Our policy of advertising is editorial in nature, and qs crammed full as we Tan make it of timely arid appealing human interest. We firmly ’believe that our copy not only competes for public attention with other advertisements, but with the news articles of the day, and wo attribute ini no small measure the prosperity of our company in recent years to the proper one of newspaper publicity.”