2. Agenda
DETERMINING A BUDGET
ALLOCATING THE BUDGET
ADJUST LAST YEAR’S BUDGET
A/S RATIO
TASK METHOD
SHARE OF VOICE VS. SHARE OF MARKET
Media Planning & Buying in the 21st Century
3. Last Year’s Budget + X%
Beginning with last year’s budget, apply an
inflationary or other adjustment
Very common, unfortunately
Finance & Accounting like this method!
2011 Budget
$1,000,000
Inflationary increase
2012 Budget
+4.2%
$1,042,000
Media Planning & Buying in the 21st Century
4. A/S Ratio
A/S Ratio – Advertising as a % of past or future sales
Applying an A/S ratio to projected sales is somewhat
more task oriented than the inflationary increase
method of budget development
Ratio can be based on industry norms for same product
category
Of can be the company’s adopted ratio
2012 Sales Forecast
Industry A/S Ratio
2012 Budget
Media Planning & Buying in the 21st Century
$55,000,000
5%
$2,750,000
5. Task Method
To develop a budget by the task method requires a good
understanding of the relationship between communications
levels and tasks, e.g., how much media is needed to raise
top of mind awareness by X% or to generate Y number of
leads?
Task
A
B
C
Total
TRPS Needed
500
750
1,000
2,250
Media Planning & Buying in the 21st Century
Cost of TRPS
$5,000,000
7,500,000
10,000,000
$22,500,000
6. Share of Voice
Many advertisers are concerned about the ratio between
their share of voice and share of market
There is a fair amount of evidence that, especially for
successful new packaged goods products, share of voice
leads attained market share of 50-100%
There is similar evidence for certain considered purchase
products
Example:
• SOM Objective
• SOV Goal
• Cost for 40% SOV
Media Planning & Buying in the 21st Century
25%
40%
$20,000,000
