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Advertising & Media

This document discusses factors that influence advertising budgets and methods for determining budgets. It outlines several important questions companies should answer like who the target consumer is and what media will be most effective in reaching them. Budgets can be determined through top-down or bottom-up approaches. Common budgeting methods include affordable, percentage of sales, competitive parity, and objective-based approaches. The budgeting process involves setting objectives, determining tasks, budget preparation, approval, allocation, and monitoring. Media scheduling considers reach, frequency, continuity and impact. Budgeting benefits businesses by planning expenses, supporting strategic objectives, and providing performance benchmarks.

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Srinivas Kumar
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69 views13 pages

Advertising & Media

This document discusses factors that influence advertising budgets and methods for determining budgets. It outlines several important questions companies should answer like who the target consumer is and what media will be most effective in reaching them. Budgets can be determined through top-down or bottom-up approaches. Common budgeting methods include affordable, percentage of sales, competitive parity, and objective-based approaches. The budgeting process involves setting objectives, determining tasks, budget preparation, approval, allocation, and monitoring. Media scheduling considers reach, frequency, continuity and impact. Budgeting benefits businesses by planning expenses, supporting strategic objectives, and providing performance benchmarks.

Uploaded by

Srinivas Kumar
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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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 .

2
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?
4
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
5
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

10
Types of Media Plan

• Geographic
 Local, spot, key market

 Regional

 National

 International

• Selective

• Combination

11
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

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