Therefore, online advertising expenses have increased at a faster rate than gross profits, a trend we expect to continue in the future.

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Sales growth, while better than expected, was only a small part of the overall better performance as Kellogg effectively reduced costs through lower advertising expenses and higher productivity.

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However, first-half gross and operating profit margins fell from 53.2% and 33.9%, respectively, to 50.2% and 31.1% due to increased advertising and marketing expenses, more aggressive pricing and a greater proportion of sales from lower-margin products.

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The company also cut back on advertising and other general expenses.

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This includes the rent that you pay for your space, your share of any utilities, professional dues, insurance, advertising, supplies and other expenses.

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While increasing advertising is bound to have a positive impact on sales would the incremental sales match up to the increase in expenses incurred on media and advertising?

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Samsung, which makes dozens of handset models a year and customizes them for mobile operators, also sells cheaper smartphones and spends about three times more on expenses such as marketing and advertising costs to promote its Galaxy brand televisions.

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Throw in some cutbacks in print advertising and Cornett has managed to slash operating expenses by 19% in the last 12 months.

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Add revenue from membership fees and advertising, then subtract the cost of setting up charging stations and operating expenses, and such a system could break even in the first year.

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