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Meaning or process of Advertising budget | Student Notes |

Meaning of Advertising budget

An advertising budget is an amount that is estimated by the company to spend on promotional activity over a certain period of time. In other words, it is the money that the company is willing to spend on advertising to fulfill its objectives. It includes the preparation of the budget, approval of the budget, Execution of budget, Monitoring and controlling of the budget.

Process of Advertising Budget

1.) Preparation

2.) Presentation

3.) Execution

4.) Control


1.) Preparation

The company's first step is to decide the total budget of advertising, which is known as budget appropriation. The overall budget is estimated based on the information on markets, product, pricing, image, message, and media, the existing sales, and affordable capacity. Now the budget is prepared for each market segment, time, and geographic area.


2.) Presentation

The budget is presented to the advertising manager after the preparation. He decides the rationale and the contribution of the budget components. The budget is discussed with the finance manager before finalizing it. The budget is modified based on marketing conditions, management requirements, change in the external environment.


3.) Execution

The execution is not an easy part. It does not mean that you prepare the budget now execute it quickly. Advertisers have to plan about the purchase of advertising time and space ( space is the area of a newspaper, web page, and other media channel ). Contingency funds are also set aside, which is used during times of need.


4.) Control

In this stage advertiser check, that there is the proper utilization of the advertising budget. It happens through constant surveillance or periodic checks, that determine whether the advertising plans are implemented properly or not. The budget is prepared under normal marketing conditions. If the conditions change, the budget is changed accordingly.


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