ADVERTISING BUDGET

An Advertising budget is a plan that sets limits on

the advertising expenditures, states how
expenditures will be allocated and controls the
disbursements over a designated period of time,
normally a year.
 Advertising Budget procedure

Budget preparation
Budget Presentation
Budget implementation.
Budget control
 Methods of Ad buget

The Percentage of sales method

Objective and Task method
Composite method
Affordable method
 The percentage of sales method

Advertising fund = rupee sales X x%

Example
Sales = 10 million
% = 3 then
Advertising fund = 10m X 3%
= 0.3 million
 Merits and demerits

Merits
- It is simple
- It works on affordability
- It is consistent
Demerits
- Wrong stressing
- It is static in approach
- It ignores long-range planning
 Objective and Task method

Role of advertising in ascertaining the objectives.

Advertising objectives are set
Cost for achieving the objectives are calculated in
terms of tasks
 Three steps

Defining objectives in quantitative terms

Outlining the tasks to achieve the goals set and in
quantitative terms
Estimating the cost of performing these tasks
 Merits and demerits

Merits
- It is objective based
- It is review based
-It is Individualistic
Demerits
- It is unscientific
 Competitive Parity method

Setting appropriation by relating it to the

expenditure pattern of the major competitors
Copy from the competitor.
Collect relevant up-to- date and authentic
information.
 Merits and demerits

It respects the superiors

It kills competitive wars
It is simple
Demerits
-It is not logical
- It is a misfit
- It sets up competitive wars.
 Affordability method

Ability to spend
Depends on the prevailing business conditions
 Merits and demerits

Merits
- It is practical
- It is simple
- It is flexible
Demerits
- It overlooks opportunities
- It is short sighed
- It ignores the ability of advertising.