Advertising Appropriation
Part of an advertiser's income that is allocated for advertising purposes for a specific period of time. The
advertising appropriation is generally established after administrative costs, manufacturing costs, direct-selling
costs, and acceptable levels of profits have been calculated. The amount of the allocation may be based on any of
the following: (1) percentage of estimated sales, (2) task to be accomplished, (3) assessment of the number of
units sold in the previous budget period, (4) competitors' expenditures, or (5) arbitrary decision. The allocation is
applied to a program over a specific time period (3 months, 6 months, 12 months, or longer-term).
Methods:
affordable method
Definition
Advertising-expense budgeting method based on what afirm's owner, or marketing
department, believes the firm can afford to spend on marketing. Since
such budgets are not based on any definite objective, the firm may spend too little or
too much relative to its needs. See also adaptive control method, competitive parity
method, objectives and task method, and percentage of sales method.
competitive parity method
Definition
Advertising-expense budgeting method based on what
abrand's or firm's competitors are estimated to be spending. This method assumes the
other firms have the samemarketing objectives and know what they are doing. See
also adaptive control method, affordable method, objectives and task method,
and percentage of sales method.
objectives and task method
Definition
Advertising expense budgeting method based on the (1)results to be achieved,
(2) strategies and tactics required toachieve those results, and
(3) costs associated with those strategies and tactics. See also adaptive control
method,affordable method, competitive parity method, andpercentage of sales method.
percentage of sales method
Definitions (2)
1. General: Method of estimating cash requirements by
expressing revenues and expenses as percentages of sales, and using these
percentages to construct a pro formaincome statement.
2. Advertising: Advertising expense budgeting method based on allocating a fixed
percentage (say 5 percent) of the anticipated sales revenue to advertising. It is based
on the erroneous assumption that "sales cause advertising" whereas the reality is just
the opposite (advertising causes sales). See also adaptive control method, affordable
method, competitive parity method, and objectives and task method.
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Role of an Advertising Agency
Advertising is a large and highly competitive industry occupying a very important position in most
developing and developed economies. With a plethora of brands on offer, the need to inform,
persuade and convince the customer is becoming increasingly important. And this is where the tools of
Advertising and Advertising Agencies that use this tool step in!
What is an Advertising Agency? An Advertising Agency or ad agency is a service provider that
works for clients to create an effective and goal oriented advertising campaign aimed at representing
the Company positively in the eyes of its target customers.
Businesses hire advertising agencies to connect with their target customers. In the face of stiff
competition, every Co / brand wants to break through this clutter and create a favourable space for
itself. Ad agencies help clients to do just this by creating attention grabbing, persuasive and
unique ad campaigns that make the brand stand out in the minds of customers. Jobs & Career
Opportunities with Advertising Agencies
Duty & Role of Advertising Agencies :
What does an Advertising Agency Do?
A plethora of Businesses, Corporations, Government Organizations and Non Profit set-ups
hire advertising agencies to advertise their products, brands and services to present and prospective
customers.
#1 Understand the Product / Company: An advertising agency begins by getting well acquainted
with the client's goals, products & target audience. This knowledge proves beneficial in planning and
creating an effective advertising campaign.
2 Plan & Create an Advertising Campaign:Once an advertising agency understands its clients'
needs, the process of brainstorming and planning begins. Keeping in mind the client's goals (which
can range from
pushing sales of its products and services
introducing new products in the market
reiterating its brand's benefits
attracting new customers or keeping in touch with old ones
the advertising executives work towards creating an effective advertising campaign (a single
or a series of attention grabbing and unique ads) which is within the client's marketing goals
and budget. This includes creating interesting slogans, attractive jingles and attention
grabbing body copy for advertisements. The client has the final word and may ask for rework.
#3 Strategize: Some Companies like to outsource their overall marketing responsibilities to
advertising agencies. In such a case, the ad agency takes over the process of brand building,
strategizing and pushing sales through other promotion techniques like sales promotions etc.
Advertising Agencies vary in size in India & abroad - from a couple of people handling all
responsibilities to a medium or large sized agency that hires specialized professionals to
function each department. It has been generally seen that Full Service Ad Agencies are well
equipped to plan and create advertising campaigns for a range of media including TV
commercials, Radio jingles, print advertisements etc. Depending on the budget, client's select
their agency.