The document discusses various factors to consider when budgeting for advertising, including: - Properly allocating the budget across communication objectives, targeted segments, and sales goals is one of the most challenging aspects of advertising budgeting. - Key parameters for allocating the advertising budget include media costs, sales territories based on factors like population and sales potential, ensuring sufficient total audience exposure across frequency and continuity of ads, and allocating budget across different products being advertised. - Common approaches to setting the advertising budget include top-down methods like allocating a percentage of sales or matching competitors' spending, or bottom-up methods like estimating costs of specific advertising objectives and tasks.

1. ADVERTISING BUDGETING

2. • Most challenging aspect in advertising is
the proper budget allocation.
• Companies use different methods.
• For that targeted segment, communication
and sales objectives has to be considered.
• In theoretical aspect budget is simple but
difficult to practice.
• Expensive process.

3. • Budgeting decision is one of the most
important and difficult decision.
• The fund available is the important factor
to be considered.
• The budget process should commence with
a statement of the broader purposes of the
advertising programme.
• It require an analysis of the company’s
overall objectives and the corresponding
marketing plans.

4. ADVERTISING BUDGET
• The cost of creating the advertising plan and
implementing it constitute the advertising budget.
• The advertising manager needs to know not only
how much will be spent for the various advertising
items, but also when these expenditures will have to
be made.
• In this way , the budget presents a cash flow picture
for the advertising function which will be helpful to
the advertising executives as well as the finance
people.

5. • How much shall we spend?
• How much extra shall we spend?
• How much are they spending?
How much will it costs?

6. Allocation of advertising budget
• Parameters are:
1. Media – media cost is the important part of advertising
budgeting. The amount to be allocated in the selected
media. It depends upon the media chosen, availability of
media, target audience to the selected media.
2. Sales territories- marketing, sales, and advertising
department must work together in allocating the advertising
expenditure by sales territories. Number of dealers in the
territory, population, number of salesmen, sales potential.
Major criteria for allocation is the sales potential.

7. 3. Total exposure- the frequency, continuity and
amount of advertising, total audience exposure.
Advertiser must develop the pattern of coverage
, advertising objectives within the budget.
4.Products to be avertised- the products to be
advertised and the amount spend on each

8. APPROACHES
1. Top-down approach
2. Bottom-up approach

9. Top- down approach
• Affordable method
• Arbitrary allocation method
• Percentage of sales method
• Competitive parity method
• Return on investment method (ROI)

10. Bottom- up approach
• Objective and task method