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    Advertisement Budget

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    Vanshika Goyal
    advertisement budget

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    Advertisement Budget

    Uploaded by

    Vanshika Goyal
    5 views13 pages
    advertisement budget

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    advertisement budget

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    advertisement budget

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    5 views13 pages

    Advertisement Budget

    Uploaded by

    Vanshika Goyal
    advertisement budget

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    You are on page 1of 13

    Advertising Budget

    https://www.wallstreetmojo.com/advertising-budget/
    https://www.yourarticlelibrary.com/advertising/methods-for-setting-advertising-budget-6-methods/48669
    https://corporatefinanceinstitute.com/resources/accounting/advertising-budget/
    https://www.educba.com/advertising-budget/
    https://penpoin.com/advertising-budget/
    Advertising Budget Definition

     An advertising budget is an amount set aside by a company planned for the promotion of
    its goods and services. Promotional activities include conducting a market survey, getting
    advertisement creatives made and printed, promotion by way of print media, digital media,
    and social media, running ad campaigns, etc.
    Examples of Advertising Budget

     #1 Netflix
     As Netflix lost its subscribers, it increased its advertising budget by 14 % to 2.55 billion
    dollars in 2023. The company took the step to get better results and regain those lost
    subscribers.
     #2 Apple
     Apple decided to invest over 100 million dollars in advertising on Twitter. Apple did so
    because Twitter has a vast user base of high net worth, and Apple is known as a premium
    brand of smartphones.
    Basis of Advertising Budget

     Type of advertising campaign that it intends to run


     Selection of target audience
     Type of advertising media
     Company’s objective of advertising
    Process of Advertisement Budget:
    Advertising Budget Methods

     Percentage of Sales: Under this method, the advertising budget is set as a percentage of either the past sale or
    expected future sales. Small businesses usually use this method.
     Competitive Parity: This method advocates that a company sets an advertising budget similar to the one set up
    by its competitor to yield similar results.
     Objective and Task: This method is based on the advertising objectives of this method. Once the objectives are
    decided, the cost is estimated to complete those objectives, and accordingly, a marketing budget is set.
     Market Share: In this method, the advertising budget is based on a company’s market share. For a higher market
    share, less marketing budget is set.
     All available Funds: This is a very aggressive method under which all available profits are allocated towards
    advertising activities. This method can be used by start-up businesses that need advertisements to attract
    customers.
     Unit Sales: Under this method, the advertisement cost per article is calculated and based on the total number of
    articles, it is set.
     Affordable: As the name suggests, the company sets its budget based on how much it can afford.
    Factors Affecting Advertising Budget

     Existing Market Share


     The competition level in the industry
     Stage of the Product Life Cycle
     Decided frequency of Advertisement
    Advertisement Strategies
    Social Media Marketing
    Advantages

     It helps to understand the advertising requirements and allocate the budget toward each
    necessary activity.
     The company’s overall advertisement expense remains monitored, ensuring that actual
    expense remains within a prescribed limit.
     When the budget is followed, it is ensured that the advertisement activities are done as per
    advertisement goals only, and no unnecessary expense is incurred.
     Each advertisement activity is kept under supervision and remains controlled well within
    budget.
    Disadvantages

     An inaccurate budget can attract unnecessary costs since the target of the budget would not
    be met.
     It may be a costly affair for companies.
     Since advertising costs will also be ultimately recovered from the customers, the prices of
    the products will increase.

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