The document discusses advertising budgeting. It defines an advertising budget as a plan that involves determining the total appropriation and allocation of monetary resources for advertising campaigns. It notes that a budget is divided into amounts set aside for specific activities like ad construction, media placement, agencies, and research. The document also outlines different budgeting methods like percentage of sales, objectives and tasks, competitive parity, and affordability. It discusses factors that affect budget size such as financial conditions, objectives, product lifecycle, and competitors. Budgeting steps include preparation, presentation, implementation, and control.

1. Advertisement Budgeting
Dr. Gopal Thapa
Tribhuvan University

2. Advertisement Budgeting
 Advertisement budget is a statement of future
estimated expenditures for ad efforts.
 It is converting the advertising plan into monetary
value.
6/2/2022 Prepared by Gopal Thapa 2

3. Advertisement Budgeting
 An advertising budget is a plan that involves
determining the total appropriation and allocation
of monetary resources for various activities in
conceiving, developing, releasing an advertising
campaign.
6/2/2022 Prepared by Gopal Thapa 3

4. Appropriation vs Budget
 An advertising appropriation is the total amount
granted or earmarked by the top management for
advertising.
 On the other hand, advertising budget is one that is
divided into amounts set aside for specific
activities.
6/2/2022 Prepared by Gopal Thapa 4

5. Advertising Expenses
 Ad construction cost
 Media cost
 Ad agency cost
 Ad department cost
 Ad research cost
6/2/2022 Prepared by Gopal Thapa 5

6. Advertising Budget Procedure
(Budgeting Steps)
 Budget preparation
 Budget presentation
 Budget implementation
 Budget control
6/2/2022 Prepared by Gopal Thapa 6

7. Methods of Budgeting
 The percentage of sales method
 Objective and task method
 Competitive parity method
 Affordability
 Incremental method
 Return on investment
6/2/2022 Prepared by Gopal Thapa 7

8. Percentage of Sales Method
 Merits
 It is simple.
 It works on affordability
 It is consistent
 Demerits
 Wrong stressing
 It is static in approach
 It ignores long range planning
6/2/2022 Prepared by Gopal Thapa 8

9. Objectives and Task Method
 Merits
 It is objective based
 It is review based
 It is individualistic
 Demerits
 It is irrelevant
 Objectives cannot be translated into tasks
 It is unscientific
6/2/2022 Prepared by Gopal Thapa 9

10. Competitive Parity Method
 Merits
 It respects the superiors
 It kills competitive wars
 It is simple
 Demerits
 It is not logical
 It is a misfit
 It is difficult to get competitors’ information
6/2/2022 Prepared by Gopal Thapa 10

11. Affordability Method
 Merits
 It is practical
 It is simple
 It is flexible
 Demerits
 It overlooks opportunities
 It is short-sighted
 It ignores the ability of advertising
6/2/2022 Prepared by Gopal Thapa 11

12. Budgeting Approaches
 Top-down approach
 Bottom-up approach
6/2/2022 Prepared by Gopal Thapa 12

13. Factors Affecting Budget Size
 Financial condition
 Objectives of advertising
 Nature of Product
 Nature of customer
 Stage of product life cycle
 Advertising strategies
 Top management philosophy
 Competitors’ budget size
6/2/2022 Prepared by Gopal Thapa 13

14. Any Query
?
6/2/2022 Prepared by Gopal Thapa 14

15. 6/2/2022 Prepared by Gopal Thapa 15

16. Thank you
6/2/2022 Prepared by Gopal Thapa 16