Module - 3

Developing and Managing

Advertising Programme
BBA VI Sem Advertising Management Lecture Notes
Module 3 Developing Advertising Programmes

Table of Contents
1. Developing Effective Advertising Programmes ................................................................................2
2. MISSION: DEFINE THE OBJECTIVE OF ADVERTISING CAMPAIGN..........................................................3
2.1. DAGMAR Approach for Setting Advertising Objectives ................................................................3
2.2. DAGMAR Approach example ........................................................................................................4
DAGMAR Approach – Advertising Objectives Checklist........................................................................4
3. MONEY: SET THE ADVERTISING BUDGET ........................................................................................5
4. Budgeting Process ...............................................................................................................................6
5. APPROACHES / METHODS TO DETERMINE ADVERTISING BUDGET ...................................................8
5.1. Percentage of sales method .........................................................................................................8
5.2. Affordable Approach .....................................................................................................................8
5.3. Competitive Parity approach ........................................................................................................9
5.4. Objective & Task method..............................................................................................................9
6. Question Bank......................................................................................................................................9

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Module 3 Developing Advertising Programmes

1. Developing Effective Advertising Programmes

As an advertising manager one needs to know how to decide on and design an effective
advertising campaign. The advertising manager has to take a set of interconnected decisions
which include setting up of advertising objectives, deciding on advertising budget, deciding on
advertising message, deciding and planning on media and finally deciding on the methods to
measure the effectiveness of advertising message.
The steps involved in an advertising process shown below.

1) Identify the Target Audience

Identify the target audience is the first step in developing an advertising campaign. The
target audience is a market segment to which a marketer wants to communicate a product
or brand message.
The target audience can be general public, specific public, and groups.
Amruthanjan pain balm  Mass Market
Marcedes Benz  Niche Market (Status conscious & High Income group customers)
Indian Defense Ministry  Youth
After the target audience is identified, the marketing communication can proceed through
five steps to develop the advertising programme, known as the Five Ms of Advertising.

Steps of Developing an Advertising Program (5 M-s).

 What are the objectives?
Mission
 What is the key objective?
 How much is it worth to reach my objectives?
Money
 How much can be spent?
 What message should be sent?
Message
 Is the message clear and easily understood?
 What media vehicles are available?
Media
 What media vehicles should be used?
 How should the results be measured?
Measurement
 How should the results be evaluated and followed up?

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Module 3 Developing Advertising Programmes

2. MISSION: DEFINE THE OBJECTIVE OF ADVERTISING CAMPAIGN

The objective of advertising is to achieve a specific communication task for a specific target
audience during a specified period of time. The objective should be laid down in clear,
precise and measurable terms so that marketers can evaluate whether it has been
accomplished by the end of the campaign.
An advertising campaign can have different objectives and they are:

Inform: A company can use advertising to

a) Inform its existing and potential customers about the launch of a new product
b) Communicate the benefits of its existing products in the market
c) Inform about the services provided by the company
d) Inform price change
e) Correct the false impression about a product and build the company’s image

Persuade: A company uses advertising to

a) Persuade customers to purchase their product/service by announcing special offers or
discounts
b) Encourage customers to switch from other brands

Remind: A company uses advertising to

1. Remind customers that a product will yield benefits in the future.
2. Retain a product in the customer’s mind during the off season
3. Remind buyers where to find a product.

2.1. DAGMAR Approach for Setting Advertising Objectives

DAGMAR Approach is a model developed by Russell H Colley for setting advertising objectives
and measuring the results for an advertising campaign. Colley prepared a report for the
association of national advertisers titled “Defined Advertising Goals for Measured Advertising
Results” which stressed on communication effects of advertising as the logical basis for setting
advertising goals and objectives against which results should be measured. Since then his
approach came to be known as DAGMAR Approach.
According to Colley, “Advertiser`s job, purely and simply, is to communicate to a defined
audience, information and a frame of mind that stimulates action. Advertising succeeds or fails
depending upon how well it communicates the desired information and attitudes to the right
people, at the right time and at the right place.”
Colley also stated the features of a good advertising objective, they are:
 Advertising Objectives must be stated in specific and measurable communication
tasks.
 It must specify a target audience

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Module 3 Developing Advertising Programmes

 It must set a standard or benchmark and specify the desired change against which
results can be measured
 It must specify a time period for achieving the objectives
According to DAGMAR Approach, advertising objectives must involve specific communication
objectives which can be measured to determine the success or failure of an advertising
campaign. Under DAGMAR Approach, communication objectives are based on hierarchy of
effects model and are divided into four stages:
1) Awareness: At this stage the targeted audience becomes aware about the brand or
product.
a. Advertiser`s Objective – Make people aware about the product.
2) Comprehension: At this stage the customers get more information about the product
and understand the benefits of using the product.
a. Advertiser`s Objective – Provide information about the product.
3) Conviction: At this stage a customer evaluates different products and plans to buy the
product.
a. Advertiser`s Objective – Create a favourable mental disposition to buy the
product.
4) Action: This stage involves the actual purchase of a product by the customer.
a. Advertiser`s Objective – Motivate the customer to buy the product.
2.2. DAGMAR Approach example
Example of an Advertising Objective Statement using DAGMAR Approach:
A company selling study material of brand X, sets the following advertising objective:
To increase among 50,000 students in Lucknow, who are preparing for CAT, the ability to
identify brand X as one of the best study material and persuade them that it will help them to
clear CAT examination of 2017, from present 5% to 25% in 6 months.
Advertiser`s Objectives:
 Target Audience: 50,000 students in Lucknow preparing for CAT
 Communication Objectives: Ability to identify brand X as one of the best study
materials and persuade that it will help to clear 2017 CAT Exam
 Desired Change: From present 5% to 25%
 Time Horizon: Six Months
DAGMAR Approach – Advertising Objectives Checklist
Colley also developed a checklist of 52 specific advertising tasks to establish objectives, few of
which are:
 Perform complete selling function

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Module 3 Developing Advertising Programmes

 Advertise a special reason to buy

 Remind people to buy
 Simulate impulse sales
 Create awareness about product or brand existence
 Create favourable emotional disposition towards the product
 Impart information regarding benefits and superior features of the product
 Combat and offset competitive claims
 Correct false impressions, wrong information and other obstacles to sales
 Aid sales force with sales promotion and selling activities and boost their morale
 Establish brand recognition and acceptance

3. MONEY: SET THE ADVERTISING BUDGET

After setting objectives, the next task is to set the budget for the advertising campaign.
Advertising budget is the amount of money allocated by a firm for its advertising campaign
for a specific period of time.
The company should be careful to spend only the right amount of money for advertising:
not more, not less.
Five specific factors are to consider when setting the advertising budget.
 Stages in PLC
 Market Share and Consumer base
 Competition
 Advertising frequency
 Product substitutability

In this advertising world, everyday we see many advertisements of different products or

brands. Organizations invest heavily in advertising to make their product popular and to
increase sales. But, here the question is - how the organizations decide - how much to
advertise? How much to invest in advertisement? What should be the size of advertising
budget?

Definition of Advertising Budget

"Advertising budget is an estimated amount an organization decides to invest in its promotional
expenditures over a period of time. An advertising budget is the money a company set aside to
accomplish its marketing objectives."

An advertising budget is the amount a company set aside for its promotional activities.
Advertising budget is used by a company for marketing the products and services to the
customers. Advertising budget includes money for doing advertising research, getting creative
made, printing material, allocating money to advertising media and ensuring proper
implementation of ad campaigns.

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Module 3 Developing Advertising Programmes

Importance of advertising budget

The objective of a company which markets its products is to earn profits and increase brand
awareness. Advertising objectives of a company is purely dependent on the advertising
campaign, type of customers, advertising media and what the company wants to achieve.
Hence, for any marketing activity that a company wants to do, it has to spend some money.
This is why advertising budget is important. It helps in understanding the objectives. the costs,
helps to formulate strategies and generate profits by increasing the overall sales.

4. Budgeting Process

Advertising budget is prepared by advertising manager in consultation with marketing-manager

of the company. The advertising budget process involves the following main steps:

Setting Advertising Objectives

Determining Tasks to be performed to Achieve Advertising

Objectives

Preparing Advertising Budget

Approval

Allocation of Advertising Budget

Monitor and Control

1. Setting Advertising Objectives:

Before deciding on advertising budget, the advertising manager must be clear about
advertising objectives. These objectives should be clearly defined in quantitative terms so that
amount of advertising budget can be decided to achieving these objectives. Main advertising
objectives can be to achieve the desired level sales, to enhance market share by specific
percentage, to increase awareness regarding product and its uses, to develop preference for
our product and to convince the customers to buy our product. These objectives will help the
advertising manager to determine and to allocate the ad budget.

2. Determining Tasks to be performed to Achieve Advertising Objectives:

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Module 3 Developing Advertising Programmes

After identifying advertising-objectives, the next step is to determine tasks, activities,

strategies, functions to be performed to achieve the advertising objectives. These tasks may
include: selection of media, selection of advertising-agency, designing of advertisement copy,
deciding frequency of advertisement, timing of advertisement, quantum of space to be taken in
print media etc. This requires a good knowledge of various activities of an effective advertising
campaign. While determining the activities to be performed the advertiser keeps in mind the
activities done last year and activities of competitive concerns.

3. Preparing Advertising Budget:

After identifying various activities to be done to achieve advertising objectives, the next step is
to find the cost of all such activities. Total cost of all such activities is the amount required for
Advertising - budget. To keep the budget flexible, certain amount in the form of provision for
contingencies is added to the total cost. Advertising budget is prepared by advertising manager
or marketing manager.

4. Approval:
After preparing advertising budget, it is sent to top-management through marketing-manager
for necessary approval, in large organizations, this proposed ad-budget is evaluated, reviewed
and scrutinized by high-powered-budget committee before submitting it to the top-
management for the final approval. Budget committee will ensure that proposed budget will be
effective enough to achieve advertising objectives, it will also ensure that all the required
activities to achieve advertising objectives have been covered and the rates/cost of various
activities are competitive.
After approval by budget committee, it is presented before top-management. Top-
management will see if the budget is affordable, need based and justified. Top-management
can impose ceilin0g on proposed budget and send it back to budget-committee for necessary
review. If it finds the budget justified and within affordable limit, then it will pass the budget.

5. Allocation of Advertising Budget:

After the budget is approved by the top management, the next step is to allocate it. Allocation
means dividing the advertisement budget on different products and activities. Advertising
budget is allocated on various product-lines, product items, media, sales-territories, etc. It
involves determining which market, product, promotional element will receive how much of
the amount of funds appropriated. Advertising allocation depends upon company's policies,
competitors strategies, nature of tasks required to achieve advertising objectives, stage of
product life-cycle, market size, company's promotional plans, charges of advertising agency etc.
While allocating the advertising budget to different activities, territories, products, the budget
should have flexibility to accommodate sudden changes in the market, competitors’ strategies
and change in other components of marketing environment. Budget allocation should not be
very rigid. Advertising manager should be authorized to make necessary modifications in
allocation of advertising-budget.

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Module 3 Developing Advertising Programmes

6. Monitor and Control:

After allocation of advertising budget, it is essential to have an adequate monitoring and
control over it. In controlling, actual expenditure is compared with planned expenditure. In
case actual expenditure is more than planned expenditure, then corrective-actions are taken
and responsibilities are fixed to ensure cost control over advertising-budget. Monitoring and
control of ad-budget is necessary to make maximum utilization of funds, to reduce wastage in
ad-expenses.

5. APPROACHES / METHODS TO DETERMINE ADVERTISING BUDGET

Percentage of Affordable
sales method Approach

Competitive Parity Objective & Task

approach method

5.1. Percentage of sales method

It is a commonly used method to set advertising budget. In this method, the amount for
advertising is decided on the basis of sales. Advertising budget is specific per cent of sales. The
sales may be current, or anticipated. Sometimes, the past sales are also used as the base for
deciding on ad budget. For example, the last year sales were Rs. 3 crore and the company spent
Rs. 300000 for advertising. It is clear that the company has spent 1% of sales in the last year.

5.2. Affordable Approach

This is, in real sense, not a method to set advertising budget. The method is based on the
company’s capacity to spend. It is based on the notion that a company should spend on
advertising as per its capacity. Company with a sound financial position spends more on
advertising and vice versa.

Under this method, budgetary allocation is made only after meeting all the expenses.
Advertising budget is treated as the residual decision. If fund is available, the company spends;

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Module 3 Developing Advertising Programmes

otherwise the company has to manage without advertising. Thus, a company’s capacity to
afford is the main criterion.

5.3. Competitive Parity approach

Competition is one of the powerful factors affecting marketing performance. This method
considers the competitors’ advertising activities and costs for setting advertising budget. The
advertising budget is fixed on the basis of advertising strategy adopted by the competitors.

Thus, competitive factor is given more importance in deciding advertising budget. For example,
if the close competitors spend 3% of net sales, the company will spend, more or less, the same
per cent for advertising. Here it is assumed that “competitors or leaders are always right.” If
not followed carefully, this method may result into misleading.

5.4. Objective & Task method

This is the most appropriate ad budget method for any company. It is a scientific method to set
advertising budget. The method considers company’s own environment and requirement.
Objectives and task method guides the manager to develop his promotional budget by (1)
defining specific objectives, (2) determining the task that must be performed to achieve them,
and (3) estimating the costs of performing the task. The sum of these costs is the proposed
amount for advertising budget.
The method is based on the relationship between the objectives and the task to achieve these
objectives. The costs of various advertising activities to be performed to achieve marketing
objectives constitute advertising budget.

6. Question Bank

1. What is Advertising Budget? Discuss approaches and procedure for determining the
size of advertising budget.
2. What do you mean by Advertising budget?
3. Explain the advertising budget Process.
4. Explain types of advertising budgeting method.
5. Discuss the role of computers in advertising.
6. What are different methods of setting the advertising budget?
7. Discuss the advertising Budget process.
8. What are various methods of setting the advertising budget?
9. Mention different methods used to prepare advertising budget?
10. What is DAGMAR? How is it useful in establishing objectives?

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