Advertising planning and budget

 Advertising Plan:- An advertising plan matches the right
audience to the right message & presents it in the right
medium to reach the target audience.
 Three elements summarize the heart of the advertising plan:-
1. Targeting the Audience:- Whom are you trying to reach?
2. Message Strategy:- What do you say to them?
3. Media Strategy:- When and where will you reach them?
 The elements that guide the development of an advertising plan
are in some ways similar to those that guide the development of
a marketing plan.
 Both include a Situation analysis, although in the case of an
advertising plan the focus tends to be specific to define the
advertising problem & identify the advertising opportunities.
 Likewise, the key planning decisions concentrate on advertising
related issues.

 Three strategic elements support the planning decisions:–
1. The creative strategy.
2. The media strategy.
3. The communication strategies.
 Implementation, tactics, evaluation & budget conclude the
advertising plan.
 Advertising plan typically contains the following:-
1. Introduction:- The introduction should provide an executive
summery and overview of the plan.
 The former, highlights the key element of the plan in a page or
less.
 The overview is more detailed, outlining the plan & the
important ideas of each part in a page or two.

2. Situation Analysis:- Just like a marketing plan, the first step in
developing an advertising plan is not planning but back-
grounding, researching, & reviewing the current state of the
business that is relevant to the brand’s advertising.
 Analysis means making sense of all the data collected & figuring
out what the information means for the future success of the
demand. Despite everyone’s best efforts, there will always be factors
that are overlooked or miss-analyzed.
 Once again the business goes through the process of conducting
a SWOT analysis at the advertising level.
 Advertisers & Ad agencies, especially, develop their own customized
process for assessing a client’s strengths, weakness,
opportunities & threats.
 Analyzing the situation & identifying the problem that can be
solved with an advertising message, is the heart of strategic
planning.

 Advertising Planning Decisions:- Several decisions are crucial to
develop an advertising plan:- How to set objectives, Identify the
target audience, Create a competitive advantage, Establish a
Brand image & Brand personality and Positioning of a product.
1. Advertising Objectives:- Every advertising campaign, and the
ads in it, must be guided by specific and clear-cut objectives.
 Advertising objectives are derived from the Marketing
objectives along with the results of the marketing &
advertising SWOT analysis.
 Basically the overriding advertising objective should be an
increase in the sale of the product or service.
 Given the huge amounts of money spent on advertising, it is
important for advertisers to know what to expect from a
campaign or an advertisement.

 There are several models that the Account managers can employ to
derive advertising objectives. All those models assume that
consumers go through a series of steps when exposed to a cue.
 Advertising researcher Russell Colley, developed a model called
DAGMAR model for Defining Advertising Goals for Measured
Advertising Results.
 This model begins with Awareness, moves to Comprehension,
then Conviction & ends with Action.
2. Targeting the Audience:- Target audiences are those consumers,
that one wants to receive the marketing message.
 They may not be the actual user or purchaser, but may have the
capability to influence the final decision making.

 Advertising planners usually describe the target audience in
respect to their demographics, because the demographics often
overlap the process of describing an audience and narrows the
targeting.
Ex:- The plan might use descriptors such as ‘women aged 25 to
35’ and ‘suburban mall shoppers’.
These two categories overlap, because a certain percentage of
women aged 25 to 35 are also in the suburban Mall category.
 Each time, one add a descriptor, the target audience gets smaller
because the group is defined more tightly. This kind of analysis
lets the advertising planner zero-in on the most responsive
audience.
 Demographic descriptions are particularly important to media
planners who are comparing the characteristics of the target
audience with the characteristics of the viewers, listeners, or a
readers of a particular medium.

 Advertisers also create profiles of target audiences that include
demographic, personality descriptors, and life–style traits.
 The intent is to make that ‘typical’ person as real as possible for
the creative people, who then try to write believable messages
that will appeal to this person.
 For this reason, advertising planners usually redefine the target as
a profile for typical product user.
 Copywriters then associate that general profile with someone
they know, so that, they can write creative messages more
easily & believably.
3. Product Feature & Competitive Advantage:- Another section in
the key decisions part of the advertising plan is to analyze the
product in comparison to competing products.

 Feature Analysis is one way marketers structure this analysis.
First, they make a chart of their product & competitors’ products,
listing each product’s relevant features.
Ex:- Taste is important for soda, horsepower & milage are
important for cars, and trendiness is important for fashion watches.
Feature Importance to Prospect Product Performances
Yours X Y Z
Price 1 + - - +
Quality 4 - + - +
Style 2 + - + -
Availability 3 - + - -
Durability 5 - + + +
Feature Analysis

 Like, the table above, evaluate how important each feature is to the
target audience (based on primary research) & how well the
products perform on that feature.
 Competitive advantage lies where the product has a strong
feature that is important to the target, and the competition has
a weaker one.
4. Brand Personality:- Given all the information gathered so far, the
account planner can create two related advertising elements:-
The Brand Personality & The Brand Position.
 Both are more relevant to advertising because they are based on
perceptions and image rather than concrete facts.
Ex:- Creating a brand personality for a potato might sound like
impossible challenge, but that actually has been accomplished in the
case of ‘IDAHO Potatoes’.

The Idaho Potato commission, a small state agency, has been so
successful in this effort that studies show that over 82% of all
Americans recognize and prefer an Idaho Potato to all others, a
higher rating than Washington Apples.
Studies show that most Americans know that an Idaho potato
can be grown only in the state of Idaho.
 This awareness is due to a concerted campaign by the Idaho
Potato Commission that registered ‘Idaho’ as the federal
trademark & educated the public about the unique qualities of
Idaho potatoes.
 The campaign also taught consumers to look for the ‘Grown in
Idaho’ seal so that they could be certain they were purchasing
genuine Idaho potatoes.
 The Idaho Potato Commission has successfully built a personality for
the unique Idaho Potato.
 This personality, along with the position for the Idaho Potato,
can now serve as the core foundation for all future advertising.

5. Positioning Strategies:- A company’s position is the first thing
that comes to mind when we hear a company’s name.
Ex:- Volvo own the safety position. Star Sports owns the sports
information position.
 Positioning goes beyond the personality in that it incorporates
many marketing tools, which, when combined together,
produce a unique perception in the mind of the customer.
6. Implementation:- Executing the advertising plan is undoubtedly
the most difficult part of the plan.
 As the old adage goes, ‘Success is in the details’, & there are
thousands of details in a typical advertising plan. Missing even
one deadline (they are very short in advertising) might scrap an
entire campaign.
 Larger Ad agencies often have ‘traffic’ people who make sure that
everything is done as the plan describes.

7. Evaluation:- Evaluation is based on how well the advertising
plan meets its objectives. A variety of research techniques are
available to evaluate effectiveness.
 Evaluation can be done before, during or after a campaign. But
at this point in the advertising plan, we are evaluating after the
fact.
 The following question needs to be addressed :- ‘Now that the
campaign has run for a prescribed period of time, how well did
we achieve our stated objectives?’

 Working of DAGMAR Model:- DAGMAR stands for Defining
Advertising Goals for Measured Advertising Results.
 It states that advertising objectives or goals should be
differentiated from the more general sales and marketing
objectives.
 The objectives guide the creative effort, media selection and
research within the advertising agency. The objectives may be
brand preference which may be expressed in quantity.
 Similarly, the sales objectives may be expressed in numbers and
figures. The DAGMAR is a potential, effective planning tool and
guide for creative groups.
 It is an integrating mechanism for behavioral scientists and
advertisers. DAGMAR has been analyzed under Communication
task, Suggestions, Contribution, & Challenges.

A. Communication Task:- An advertising goal or objective is a
specific communication task to be accomplished among a
defined audience in a given period of time.
 Advertising as a mass communication is intended to create
awareness, impart information, develop attitudes and induce
action.
 It has no immediate impact on sales as compared to other
marketing components.
 However, an advertising campaign, has a greater impact on sales
than other efforts of sales promotion, as Awareness,
Comprehension, Attitude, & Action are the four important steps
in achieving communication results.

 The DAGMAR is one of the hierarchy–of–effects models and has
specific goals. These are:-
i. Measurable:- The DAGMAR is specific and measurable in
quantity.
 It shows the appeal or image to be communicated.
 The measurement procedure is also described. The quality of a
brand is fully described by the advertising message.
 The competitive values are fully emphasized. The test appeal is
not directly requested; rather it is asked whether the article has
been tried during the last 6 months; if not, it should be
purchased just for trial purposes.
 The objective is not left to chance, but is specifically stated –
what it is and how the purpose is to be achieved by advertising.

ii. Bench Mark:- The bench mark reveals whether the product is in
the line of popularity.
 If it is properly analyzed, where the product is, then it would be easy
to tell how we can reach the destination, but unless the bench
mark and last destination are known, it is difficult to know the
goal or objective.
 Bench mark can ascertain the objectives quantitatively. It also
suggests how the goal or objective can best be achieved.
 DAGMAR shows whether the existing image needs to be
changed, reinforced, diffused or sharpened.
 This is a pre–requisite for the ultimate measurement of the
results and is an essential part of a planning program.
 The key to DAGMAR is the generation of well–conceived
measures before advertising goals are determined.

iii. The Target:- The people at whom the communication is
directed should be known to the advertiser before he launches
the advertising campaign.
 The segmentation strategy should be specifically laid down by
the advertiser.
 The relevant communication is essential for the attainment of
the sub–objective or for reaching the target audience; should be
incorporated in the advertising campaign.
 The audiences are divided for the communication hierarchy.
Some audiences may be put under unawareness, others under
awareness, and so on, in the effects–hierarchy of
communications, viz., unawareness, awareness, comprehension &
image, attitude, and action.
 The primary target can be known when segmentation and sub–
segmentation are defined.

iv. Time:- The time–period of the objective is an important factor.
 The objectives for a one–year period or a six–month period will
require the necessary inputs for the achievement of the goals within
the period.
 The results should be available for comparison with the
objectives.
 The comparison will show whether there should be a
contraction, expansion or change in the current advertising
activities.
v. Written:- The objectives should be written.
 The basic element, basic shortcomings and misunderstanding
are exposed by the written objectives.
 The written objectives are the guidelines for a comparison of the
results with the activities of advertising.

B. Suggestions:- The DAGMAR has given some suggestions for the
implementation of objectives and goals.
 One important suggestion, is the Systematic information
gathering process known as 6–m approach, which should be
employed for analyzing the product and the market.
 The term 6–M approach refers to the analysis of Merchandise,
Markets, Motives, Message, Media and Measurement.
i. Merchandise:- The merchandise is the product to be advertised.
 Weaknesses are avoided and not communicated to the audience.
 The attributes of the merchandise and the weaknesses of the
competitors’ products are emphasized in the advertisement
campaigns.

ii. Market:- A market is composed of Present and Potential
consumers of the product.
 It is divided into segments. With the segmentation approach, one
reaches each segment with the relevant information and facts.
 The intermediaries are the middlemen between consumers and
producers. They are provided with adequate facilities to
approach a market segment effectively.
iii. Motives:- The motives underlying consumer behaviour and the
approaches to deal with the consumers in the right way, are
evaluated for effective results.
 Motives change can be utilized for advertising purposes.
iv. Message:- An effective message is designed to appeal to
consumers.
 Several alternative messages are developed, and the best message
to suit the situation is selected for the purpose.

v. Media:- Print media and broadcasting media are selected after a
thorough investigation and survey of their advantages, cost–
effectiveness in the given market segment, period and level of
communication.
vi. Measurement:- Measurements are framed to provide real
guidelines for comparison of results with the advertising
efforts.
C. Contributions:- DAGMAR offers the benefits of Systematic
control, Guidance to Creativity, & use of Behavioral theories to
advertisers.
 DAGMAR is a planning tool which leads to systematic
performance and control.
 It also provides a checklist of campaigns and budgets and
provides guidelines to creative action.

 It creates awareness, interest and desire among consumers.
Market segments and constraints are also analyzed with a view
to make advertising effective.
 The use of creativity is developed in its natural form within the
range of objectives and goals.
 DAGMAR helps incorporate behavioral theories in an
advertising campaign.
 The social, psychological, sociological, ecological,
demographic and geographic factors are blended suitably within
the advertising campaign. These factors are given due
consideration and are integrated into a quantitative–mix efforts
and objectives.
 Quantitative presentation is important in DAGMAR for
advertising purposes.
Note:- Establishing specific goals, effective strategies, performance
and control over efforts are the real contributions of DAGMAR.

D. Challenges:- Like any other model DAGMAR is also not free from
problems. It has created considerable controversy among
advertising managers and researchers. The challenges of
DAGMAR are given in six forms:-
i. Sales Goals:- The advertising effects should be measured only in
terms of sales. The goals of awareness, interest, desire &
attitude are merely steps in promoting and achieving sales
goals. If these objectives do not contribute to sales then they
don’t have any meaning in the advertising decision–making
process.
ii. Practicability:- The DAGMAR is not very practical. The 6–M
approach is purely academic. Practical problems are not
touched. Practical solutions, as devised by DAGMAR, are not
easily applicable.
iii. Measurement Problems:- Measurements are suggested but how
facts, attitudes, awareness, etc. are to be measured has not
been practically decided. The scale device is purely a
theoretical solution of the problem. Its measurement of results
and effects and also of objectives has become a very difficult
proposition.

iv. Interruption:- The hierarchy model is full of noise and
interruptions. There are several other factors which influence
sales. Advertising is only one such factor, making it very
difficult to relate the advertising effort to its results.
v. Pure Idea:- The DAGMAR is a pure idea which is very difficult to
realize in the product field. It is multi–dimensional and cannot
be properly understood by advertisers.
vi. Effect Model:- The DAGMAR believes in the effect model but no
hierarchy–effect model has been used effectively in advertising.
The most important controversy involves attitude and behavior.
The Attitude–Behavior relationship is established for
advertising purposes in a different manner and not in the
manner stipulated systematically by DAGMAR.

 DAGMAR–II:- DAGMAR –II is an improvement over DAGMAR in
many ways, while retaining its important features.
 The measure is based on the desired action, i.e., to get people for
trial action or to increase brand loyalty.
 The hierarchy–of–effects model of communication is improved by
determining the model that will apply to a particular
situation.
 The use of an appropriate model involves intervening variables.
Communication and the behavior process are unique to a
particular situation, hence it is unrealistic to assume that a
particular model will apply to all situations.
 DAGMAR–II is more analytical because Image, Attitude and
Behavior are more precise and capable of empirical
assessment.

 Advertising Budget:- Determining the total allocation to
advertising is not an easy task. Often an amount is budgeted for
advertising during the budget planning process (just before the
end of the fiscal year).
 The amount could be totally arbitrary, based on the advertising
manager’s ability to beg, borrow or steal.
 In addition, the allocation of fund usually is a political process.
 Companies led by Financial types are unlikely to give much
money to advertising & will require the advertising manager to
justify each and every penny asked for.
 Where as, companies led by Marketing or Advertising types are
likely to be generous to advertising & will view the cost as a
long–term investment.

 Although, the appropriation & budgeting process relies on
numerical information, the process is more Art than Science.
 It is often based on educated guesses, tradition, or the financial
condition of the company.
 It is also in constant flux, i.e., if a campaign seems to be
working, it is easier to get additional funds. But the opposite is
also true.
 At the same time this is also true that, if a company has a
financial downturn, advertising will probably take the first hit.
 The budget is a critical part of planning an advertising
campaign, it also determines how many targets & multiple
campaign plans, a company or brand can support.
Ex:- McDonald’s, TATA, Maruti can support multiple campaigns.

 Certain types of advertisers – for example – Industrial & Business–
to–business, operate on smaller advertising budgets than
consumer durable companies. Their media choices and narrow
targeting strategies reduce their budgets, so these companies
often rely more on direct mail, trade publications and
telemarketing for their advertisings.
 The big budgeting question at the marketing–mix and
marketing communication–mix level is:- How much should we
spend on advertising?
 There are five common budgeting methods, which help us answer
this question:-
1. Historical Method:- Historical information is the source for
this common budgeting method.
 A budget may simply be based on last year’s budget, with a
percentage increase for inflation or some other market place
factor.
 This method, though easy to calculate, has little to do with
reaching advertising objectives.

2. Objective–Task Method: Bottom–Up:- The objective–task method
is also a common method for determining the budget.
 This method looks at the objectives for each activity and
determines the cost of accomplishing each objective.
Ex:- What will it cost to make 50% of the people in the market,
aware of the said product?
How many people do we have to reach & how many times?
What would be the necessary media levels & expenses?
 The advantage of this method is that the objectives are the
starting point. Conversely, its results are only as good as the
stated objectives and the allocated amount assigned to each
objective.

3. Percentage–of–Sales Method:- The percentage of sales method
compares the total sales with the total advertising budget
during the previous year or the average of several years to
compute a percentage.
 This technique can also be used across an industry to compare
the expenditures of different product categories on
advertising.
 There are two simple steps to be followed:-
Step 1:-
Step 2:-
New Advertising Budget = % of Sales * Next Year’s Sales Forecast.
Past Advertising Expenditure (in Rupees)
Percentage of Sales =
Past Sales (in Rupees)

 This method has got two advantages. It is simple to use, and
expenditures are directly related to the funds available.
 However it has several limitations also. It assumes that
advertising is a result of sales rather than the cause of sales.
 Also, this method does not include the possibility of diminishing
returns, means that after a certain point additional money may
generate fewer & fewer sales.
 In short, using the percentage–of–sales method may mean
under–spending when the sales opportunities are high, and,
overspending when the potential is low.

4. Competitive Methods:- Budgeting often considers the
competitive situation and uses competitors’ budgets as
benchmarks.
 Competitive parity budgeting relates the amount invested in
advertising to the product’s share of market.
 Share–of–mind concept suggests that the advertiser’s media
presence – affects the share of attention, the brand will receive,
and that, in turn, affects the market share the brand can
obtain.
 The depiction of these relationship can be as follows:-
Share of Media Voice = Share of Consumer Mind = Market Share.
 The relationships depicted above are only a guide for budgeting.

 The actual relationship between Share of media voice and Share
of mind or Share of market depends to a great extent on factors
such as the creativity of the message and the amount of clutter
in the market place.
 A simple increase in the share of voice does not guarantee an
equal increase in share of market.

5. All You can Afford:- When a company allocates whatever is left over
to advertising, it is using the ‘All you can afford budgeting’
method.
 It is actually not a method, but rather a philosophy about
advertising.
 Companies using this approach don’t value advertising as a
strategic imperative.
 However, as unsophisticated this approach appears, it might
prove effective if the allocations made to the other business
functions do well.
Note:- While all these budgeting techniques have their proponents, the
organizations select from them the one, they feel is going to
suit them the most.

Advertising planning and budget

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