The document discusses methods for setting an advertising budget. It is a financial plan that allocates funding for advertising over a specific future period of time. It is prepared by the advertising manager in consultation with marketing and approved by top management. The most logical method is to first set advertising objectives based on market research, then determine the tasks needed to achieve those objectives, and use that to prepare the advertising budget.

2. Advertising budget is a financialdocumentthat shows the
total amount to be spent on advertising and lists the way
this amount is to be allocated.
• It is a translation of an advertising plan into monetary
units.
• It helps in meeting advertising objectives of an
organisation
• It is prepared for a specific futureperiod of time.

3. • It is prepared by the advertising managerin consultationwiththe
marketingmanagerand approved by the top management.
• It shows the plan of allocation of available fundsto various
advertising activities.

5. • Advertisers base their advertising budget onwhat they can afford.
• An amount after allocating all the relevant company expenditure is given for
advertising.
• It is basedon thepresumption that the firm can only afford that muchamount on
advertising.
• This method is not logical since it doesn’t considering the advertising needs of the
firm.

6. • A fixed percentage of the sales figure is allocated as advertising budget.
• This sales figure could be lastyear’s salesfigure or the average of the
salesfigures of lastyears.
• It may also use projected salesfigure in determining the advertising
budget.

7. • The advertising expenditures of competitors are takenas the
guidelines for setting advertising budget.
• It is based on the belief thatthe firm willmaintainhis market share
asit spend same amount on advertising as hiscompetitors
• This method is used as adefensive device by the advertiser

8. • Most logical way of settingadvertising budget.
• It focus on the advertising task thatis to be achieved.
• Advertising objectives are fixed after intensivemarket
research.

9. 1. Setting advertising objectives
2. Determining the taskto be performed to achieve the objectives.
3. Preparing advertising budget.
4. Approval of the top management.
5. Allocation of advertising budget
6. Monitor and control