Unit 3

Advertising Budget

Advertising Budget
Ad budget is a plan for the companys future advertising, it can make a useful contribution to a profitable operation. It provides a programme of the best assortment of types of advertising to be undertaken along with its timetable and frequency. In addition to its planning function, the budget also serves as a control of advertising expenditure Now advertising is being treated as an investment and because it earns good returns through increased sales. But still in the concept of accounting, it is considered to be a business expenditure

Methods of Ad Budget

Methods of Ad budget
Objective and Task approach:- starts with a stated objectives for an advertising effort. Goals related to production costs, target audience reach, message effects, behavioural effects, media placement, duration of the effort etc. are specified. The budget is formulated by identifying the specific tasks necessary to achieve different aspects of the objective

Steps in implementing the objective

1. Determine Costs based on build-up analysis:Consider the following factors Reach Frequency Time Frame Production costs Media expenditures Ancillary costs Integrating other promotion costs

Steps in implementing the objective

2. Compare costs against industry and corporate benchmarks 3. Reconcile and modify budget 4. Determine time frame for payout

Administering the budget

After the budget has been decided upon, the next logical step is to distribute it on various products/product lines, media, markets (segments and geographical territories), etc. Some expenses are to be apportioned to the advertising department in the company and to advertising research. After this detailed allocation of the fund, it is essential to have an adequate monitoring and control.

 The budget should have flexibility enough to accommodate the sudden changes occurring in the market, the competitive structure etc., Company should systematically test the efficiency of advertising It is a continuous process, hence continuity is an important aspect of the advertising budget

Distribution of Advertising expenditure

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Consumer Advertising
Advertising Budget

Sales Promotion POP Adv. Exhibits Packaging Sales Aids Catalogs, Manuals etc. Premiums Direct Adv.

Public Relations House Organ

Print Consumer Magazines Trade Papers News Papers TV Out door & Transportation Adv. Radio

Educational and Public service mail

Annual Report