Madison Avenue starts swinging to a rock 'n' roll beat

This small firm, in business for 20 years, grosses $200,000 an hour. Dress is informal: No one wears ties. In fact, a founder, who attended the London School of Economics, shows up for work in a football jersey decorated with feathers.

A California computer corporation, perhaps? A money market fund run by eccentric MBAs?

Nope. It's the Rolling Stones - a rock group that's put rhythmn in the phrase ''supply-side economics.''

Their recent American tour was the most lucrative in pop music history, raking in an estimated $40 million in ticket receipts. At that rate, the group grossed approximately $400,000 for each two-hour show. More significantly, the tour showcased rock's vast potential as a marketing tool - a natural medium for selling the ''baby boom'' demographic bulge everything from radios to perfume. Indeed, one perfumemaker partially sponsored the tour.

''The Woodstock generation has grown up and moved into decisionmaking positions, and Madison Avenue has opened its eyes'' to the possibility of reaching them through rock music, says Joshua Simons, executive director of the promotion firm, Rockbill Inc.

Before he became famous as the Dickensian gamin of rock and roll, Stones star Mick Jagger was a student at the London School of Economics. Reportedly, he still keeps a sharp eye on details that affect the bottom line (he rode to concerts in a limousine, but other members of the group arrived in vans). And during their 24-city swing the Stones seemed at times the most profitable British industry operating in North America.

Besides their estimated 75 to 90 percent share of the ticket money, the group had a healthy $10 million income from sales of T-shirts, programs, and bumper stickers, say informed sources.

And the tour undoubtedly spurred sales of the Stones' smooth new album, ''Tattoo You,'' which has already sold 3 million copies, ringing up $4.5 million in musician royalties.

That's not all. One of the Stones' final concerts was broadcast live over cable TV to customers in 12 cities, who paid $10 apiece for the privilege of watching Jagger cavort to ''Jumping Jack Flash'' on screens in their living rooms. The cable booty was estimated by industry journals to top $5 million.

Of course, not all this cash will be carted off to the band members' mansions in tax havens around the world. The theatrical experience is half the fun of a rock concert, and, at least where the Rolling Stones are concerned, theatrics don't come cheap.

Their 20-song sets were played on a $500,000, multilevel revolving stage complete with coolers, a dressing room, and two ''cherry picker'' pneumatic lifts that waved Mick over the crowd at odd moments. During the grand finale, with the band belting out ''I Can't Get No Satisfaction,'' giant bags of balloons emptied to cover the audience.

This movable extravaganza was carted around the country by a fleet of semi-trailers and a chartered Boeing 727. And, from their share of the take, the Stones had to pay salaries and board for their entourage - 52 guards, technicians, and hangers-on for the indoor concerts, 68 for the outdoor dates.

Besides generating a GNP equivalent to a small principality, the Rolling Stones tour was a highly visible example of the growing trend to use pop music and pop music stars as marketing tools, much as sports and athletes traditionaly feature in commercials.

Part of the tour's production costs were underwritten by perfume manufacturer Jovan, which signed a ''multimillion-dollar'' pact with the group for ''promotional considerations,'' says a spokesman for the Stones.

Such arrangements are becoming more common. Rough-voiced Scot singer Rod Stewart is touring currently with partial sponsorship from Sony recording tape. Funk band Earth, Wind, and Fire now endorses Panasonic products, with band members featured in finger-snapping national TV commercials.

Once considered to reach only a narrow age group, rock music has now been around long enough to be much more of a mainstream cultural experience.

''We think rock music now has much broader appeal,'' says Joshua Simons of Rockbill, the firm that put Jovan and the Stones together. ''It's a great way to reach young adults.''

From an advertiser's point of view, says Simons, pop music is a wonderful way of pinpointing an audience - a cowboy boot manufacturer, for instance, might sponsor a country western singer.

For its cash, Jovan didn't get a specific endorsement of its products. But the firm had its name on each of the 2 million tickets sold, and stamped its logo on tour T-shirts and posters.

In addition, the company was allowed to designate an ''official radio station'' wherever the Stones appeared -- and the importance placed on this designation shows what a powerful draw a big name in the music industry can be.

An official radio station was allowed to purchase tickets for use in promotional contests. What they gave up in return is a matter of some debate.

WWDC-FM, official station for Washington, received 600 tickets for ''providing the most innovative promotional support for Jovan,'' says station vice-president Don Davis.

A competitor, WRQX-FM promotion director Rick Fowler, says it was a straight bidding contest - whoever promised Jovan the most free commercial time was designated ''official.''

''And they wanted a fairly outrageous amount,'' Fowler adds. ''It got to a point where it was just ridiculous.''