ADVERTISEMENT

BUDGETING
An advertising budget is an
estimate of a company's
promotional expenditures over a
certain time period.
1. It defines how much to spend
on advertising.
2. It is one of an important
decision.
3. It will not be same for every
companies & industries
METHODS OF ADVERTISEMENT BUDGET

1. Percentage of Sales Method

2. Objective and task Method
3. Competitive Parity Method
4. Affordable or Fund Available Method
5. Expert Opinion Method
 PERCENT OF SALES METHOD
1. It is a commonly used method to set
advertising budget.
2. In this method, the amount for
advertising is decided on the basis of
sales.
3. Sometimes, the past sales are also used
as the base for deciding on ad budget.
For example, the last year sales were Rs.
3 crore and the company spent Rs.
300000 for advertising. It is clear that the
company has spent 1% of sales in the last
year.
 OBJECTIVE AND TASK METHODS

 This is the most important budget method

for any company.
 This method identifies the requirement of
company.
 It helps to manager for developing
advertisement budget.
 AFFORDABLE AND FUND AVAILABLE
METHOD
The method is based on the company’s
capacity to spend. It is based on the notion
that a company should spend on advertising as
per its capacity. Company with a sound
financial position spends more on advertising
and vice versa.
Under this method, budgetary allocation
is made only after meeting all the expenses.
Advertising budget is treated as the residual
decision. If fund is available, the company
spends; otherwise the company has to manage
without advertising. Thus, a company’s
capacity to afford is the main criterion.
 EXPERT OPINION METHOD
Many marketing firms follow this method. Both
internal and external experts are asked to
estimate the amount to be spent for
advertisement for a given period. Experts, on
the basis of the rich experience on the area,
can determine objectively the amount for
advertising. Experts supply their estimate
individually or jointly. There are two types of
experts-
1. Internal Experts
2. External Experts
 ADVERTISEMENT EFFECTIVENESS

Ad effectiveness:-
1. To make sound future decisions.
2. To impress upon the top management
3. To so the clear picture of product.
4. To keep in touch with the new trends.
CAN WE MEASURE THE ADVERTISEMENT
EFFECTIVENESS ?
 Its difficult to measure the advertisement effectiveness in mathematical
terms or standards.
 Advertisement is not sell the product or services to the business houses.
 Other factors which play important role in advertising such as-
Price, Quality, Packaging, Product features, Availability the contribute to
increase the sales.
 Huge money invested on advertising due to which reason it has emerged a
strong tool for increasing sales.
 TYPES OF TESTING

 Pre Testing
 Post Testing
 PRE TESTING

 Pre­testing is the type of testing the advertisement before launching.

 It helps to preparing effective advertisement for the business.

Type of Testing:-

1- Checklist Test

2- Opinion List

3- Inquiry Test
 POST TESTING
 Post testing is done after the advertisement.
 It helps to know the success of advertisemente
achieved. Following are the types post testing method.

1- Recognition Test
2- Bru zzone Test
PREPARED BY

ABSAR KHAN
MBA 2 year
nd