ADVERTISING &

MEDIA
 ADVERTISING BUDGET
• An advertising budget is the money a company is
willing to set aside to accomplish its marketing
objectives.
• A subset of the larger sales budget .

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FACTORS INFLUENCING ADVERTISING
BUDGETS
Product Hidden product
life cycle qualities

Product Product
durability price

Purchase
Differentiation frequency
 ANSWERING SEVERAL IMPORTANT
QUESTIONS?

• Who is the target consumer?

• What media type will be most useful in reaching the

target consumer?
• What is required to get the target consumer
to purchase the product?
• How much profit is likely to be earned for each dollar
spent on advertising?
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 Two Approaches to decide budget

Top –Down Approach

Activity based
Management or Object
decides how much Oriented
to spend approach by
managers

Bottom- Up
Approach
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TOP-DOWN VS. BOTTOM-UP BUDGETING
 METHODS TO DETERMINE BUDGET

1. METHODS TO DETERMINE --AFFORDABLE METHOD

• Budgets on what we can afford.

• Small business

2. Methods to determine –Percentage of Sales Method

• Most commonly used by small business.

• Takes a percentage of either past or anticipated sales and allocates that percentage of
the overall budget to advertising.
3. Methods to determine --Competitive Parity Method
• If a business is aware of how much its competitors are spending to advertise their
products and services, the business may wish to budget a similar amount on its own
advertising by way of staying competitive.
4. Methods to determine –Objective and Task Method
• Correlate advertising expenditures with overall marketing objectives. This
correlation is important because it keeps spending focused on primary business
goals.
 BUDGETING PROCESS

•Setting advertising objectives

• Determining the task to be performed to achieve the objectives.
• Preparing advertising budget.
•Approval of the top management.
•Allocation of advertising budget
• Monitor and control
 Media Scheduling
• Reach + Frequency + Continuity +Impact
• Reach : % of target audience with opportunity for exposure to
media vehicle(s) or media plan in a given time frame.
• Frequency : average number of times target is likely to be exposed
to the ad in a given time frame
• Continuity : how long the campaign runs continuous vs. fighting vs.
pulsation
• Impact : the attention-getting ability of the media vehicle(s)
selected to run the ad

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 Types of Media Plan

• Geographic
 Local, spot, key market

 Regional

 National

 International

• Selective

• Combination

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THE BENEFITS OF BUDGETING SHOULD NEVER BE
UNDERESTIMATED WHEN RUNNING A BUSINESS:
• Budgeting estimates revenue, plans expenditure and restricts any spending that is not
part of the plan
• Budgeting forces you to determine the total number of marketing impressions you will
need to successfully hit your projected revenue increase.
• Budgeting ensures that money is allocated to those things that support the strategic
objectives of the business.
• A budget gives you a benchmark to measure your monthly progress.
• A well communicated budget helps everyone understand the priorities of the business
• The process of creating A budget provides opportunities to involve staff, resulting in
them sharing the division; and
• Budgeting allows to think about where to go for additional impact.
• Engaging the team in reviewing and comparing the budget with actual can provide
information that highlights the strengths and weaknesses of the business.
If you’re running your business without a proper budget you may find you’re