An advertising budget is the money a company is willing to set aside to accomplish its marketing objectives.

1. ADVERTISING BUDGETING
Prepared By
Nijaz N

2. Advertising Budget
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• 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 .

3. answering several important questions?
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• 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
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Top –Down Approach
Bottom- Up Approach
Management
decides how much
to spend
Activity based or
Object Oriented
approach by
managers

5. Methods to determine --Affordable method
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• Budgets on what we can afford.
• Small business
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.

6. Methods to determine --Competitive Parity Method
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• 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.
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.