What Are the Different Parts of an Advertising Budget?

Advertising budget is a pre-planned expenditure plan for advertising. Usually at the beginning of the new year, based on the situation of previous years, combined with the production and sales plan of the current year, the total amount of advertising costs and the use range of advertising costs are formulated. Factors that affect advertising budgets include product life cycles, competitors, sales targets, market scope, advertising media, and corporate financial affordability. According to the factors that affect the advertising budget, the methods of calculating the advertising budget are as follows: (1) the goal achievement method. Under the premise of setting sales goals, in order to achieve the sales goals, the advertising budget is set according to the cost needs of the advertising campaign. (2) Sales percentage method. Determine the advertising budget according to the sales ratio. (3) Profit percentage method. The ratio of extracting advertising costs based on the profit of the enterprise. (4) Confrontation Law of Competitive Enterprises. Budget your advertising campaigns based on your competitors advertising campaigns. (E) Any percentage. Make advertising budget estimates based on the intuition and experience of advertising operators. (6) Possible spending method. A method of determining advertising budgets based on the financial resources of an enterprise. ^[1]

Advertising budget

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Advertising budget is a pre-planned expenditure plan for advertising. Usually at the beginning of the new year, based on the situation of previous years, combined with the production and sales plan of the current year, the total amount of advertising costs and the use range of advertising costs are formulated. Factors that affect advertising budgets include product life cycles, competitors, sales targets, market scope, advertising media, and corporate financial affordability. According to the factors that affect the advertising budget, the methods of calculating the advertising budget are as follows: (1) the goal achievement method. Under the premise of setting sales goals, in order to achieve the sales goals, the advertising budget is set according to the cost needs of the advertising campaign. (2) Sales percentage method. Determine the advertising budget according to the sales ratio. (3) Profit percentage method. The ratio of extracting advertising costs based on the profit of the enterprise. (4) Confrontation Law of Competitive Enterprises. Budget your advertising campaigns based on your competitors advertising campaigns. (E) Any percentage. Make advertising budget estimates based on the intuition and experience of advertising operators. (6) Possible spending method. A method of determining advertising budgets based on the financial resources of an enterprise. ^[1]

The advertising budget is the planning of the total amount of funds required by the other party's advertising campaign, its scope of use, and its allocation method in a certain period of time.

Advertising budget is

The content of advertising fees mainly includes various expenses required in advertising campaigns: market research fees, advertising design fees, advertising production fees,

Advertising budget is

There are dozens of methods currently used by the advertising industry to formulate advertising budgets. There are seven common:

After determining the advertising budget, the total advertising budget should be allocated to each advertising campaign according to the requirements of the advertising plan. This is a means of organizing, coordinating, and controlling the implementation of advertising programs through advertising budgets.

Budget allocation

1. The distribution of advertising costs among the various media selected by the media distribution advertising plan is divided according to the media strategy of the advertising, such as how much newspaper advertising and television advertising account.

2. Intra-media distribution In the inter-media distribution, the block allocation results of the same medium are redistributed among different media units, such as how many newspapers are allocated in the newspaper item.

3 The regional distribution advertising plan stipulates that advertising objects in different regions should allocate advertising costs among different regions according to needs, and implement block allocation, such as urban and rural, domestic and foreign, north and south.

4 Allocation by time Long-term advertising plans include annual advertising costs, and annual advertising plans include quarterly and monthly advertising costs. In addition, a part should be reserved for the cost of mobility.

5. Product category allocation refers to the allocation of advertising costs between different advertising products in the advertising plan. In addition, public relations, corporate image advertising, and concept advertising also share a portion of the cost.

6. The distribution of advertising objects is based on the different advertising objects in the advertising plan, such as group users, corporate users, and end consumers. Groups and corporate users generally score less, and end consumers should score more.

7. Distribution by department This refers to the distribution of advertising costs inside and outside the enterprise, such as the distribution of self-operated advertising costs and other advertising costs. In the self-operated advertising fee, it is also necessary to subdivide according to the expenses of each advertising business department, such as the creative department, management department, production department, media department, etc., to allocate the fees in place. There should be more and more, and less should be less, to ensure the need to execute advertising plans.

Influencing factors

The distribution of advertising fees is subject to many factors, such as product conditions, profit margins, sales conditions, market coverage, market competition, economic development, and the tasks of various departments.

1. Product life cycle: The allocation of advertising costs between products depends on which stage of the life cycle the product is in. In general, the advertising costs of products in the introduction and maturity periods should be more than the advertising costs of growth, saturation and decline periods.

2. Profit margin: Products with high profit margins generally have more investment in advertising costs. Conversely, products with lower profitability have less investment in advertising costs.

3 Sales volume: For products with a large sales volume, the general investment in advertising costs is large, and vice versa.

4 Market Coverage: National Advertising Fees> Regional Advertising Fees> Local Advertising Fees.

5. Market competition: fierce competition, more investment in advertising costs, and less on the contrary.

6. Economic development status: The economic situation is good, the market is booming, the products are selling well, and the supply exceeds demand, so the investment in advertising costs is small; otherwise, the advertising costs are large.

7. Tasks of each department: The nature and workload of the work burdened by each department are different, and the distribution of advertising costs is different. The specific ratio will be adjusted according to the situation, but the proportion of purchasing media costs of 70-90% is beyond reproach.