Final answer:
The majority of an advertising agency's expenses are typically in salaries and benefits for employees, as this sector is highly personnel-intensive. While media costs do represent a significant expense category, they usually do not exceed the expenditure on staff.
Step-by-step explanation:
When analyzing the majority of an advertising agency's expenses, several categories come into play such as media costs, salaries, sales promotions, production overheads, and market research. However, a significant portion of an agency's budget typically goes to salaries and benefits for employees. This is because advertising work is highly personnel-intensive, where creative talent, account managers, and other staff play pivotal roles in campaign development and execution. High-level skills and constant client servicing necessitate a substantial investment in human capital. While other expenses such as media costs (which include TV, internet, and other forms of advertising) are substantial, they generally do not surpass the combined expense of salaries and benefits within such agencies. Additionally, costs involved in production, promotions, and market research although significant, fall shorter when compared to media spending and employee-related expenses.