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Recognition that communication effects are the logical basis for advertising goals and objectives against which success or failure should be measured.

The DAGMAR Approach!

Define Advertising Goals for Measuring Advertising Results



Advertisement budgeting
Budgeting is a very crucial element of the advertising plan . As advertising is one of the most expensive modes of marketing communications. Some of the techniques that advertisers use for planning the budget are


Some of the techniques that advertisers use for planning the budget are
Percentage of Sales method Objective and Task method Competitive Parity method Market Share method Unit Sales method All Available Funds method Affordable method


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It is important to notice that most of these methods are often combined in any number of ways, depending on the situation. Because of this, these methods should not be seen as rigid, but rather as building blocks that can be combined, modified, or discarded as necessary. Remember, a business must be flexibleready to change course, goals, and philosophy when the market and the consumer demand such a change.

PERCENTAGE OF SALES METHOD:In this method an advertiser takes a percentage of either past or anticipated sales and allocates that percentage of the overall budget to advertising.

OBJECTIVE AND TASK METHOD The benefit of this method is that it allows the advertiser to correlate advertising expenditures to overall marketing objectives. This correlation is important because it keeps spending focused on primary business goals. With this method, a business needs to first establish concrete marketing objectives, which are often articulated in the "selling proposal," and then develop complimentary advertising objectives, which are articulated in the "positioning statement." After these objectives have been established, the advertiser determines how much it will cost to meet them. Eg:- Expansion of area market share by 15 percent within a year,


While keeping one's own objectives in mind, it is often useful for a business to compare its advertising spending with that of its competitors. The theory here is that if a business is aware of how much its competitors are Spending to inform, persuade, and remind (the three general aims of advertising) the consumer of their products and services, Then that business can, in order to remain competitive, either spend more, the same, or less on its own advertising 9

MARKET SHARE METHOD Similar to competitive Equality, the market share method bases its budgeting strategy on external market trends. With this method a business equates its market share with its advertising expenditures.


UNIT SALES METHOD.! This method takes the cost of advertising an individual item and multiplies it by the number of units the advertiser wishes to sell.


This aggressive method involves the allocation of all available profits to advertising purposes. This can be risky for a business of any size, for it means that no money is being used to help the business grow in other ways (purchasing new technologies, expanding the work force, etc.). Yet this aggressive approach is sometimes useful when a start-up business is trying to increase consumer awareness of its products or services. However, a business using this approach needs to make sure that its advertising strategy is an effective one, and that funds which could help the business expand are not being wasted.



With this method, advertisers base their budgets on what they can afford. Of course, arriving at a conclusion about what a small business can afford in the aim of advertising is often a difficult task, one that needs to incorporate overall objectives and goals, competition, presence in the market, unit sales


ACTIVITY TIME! Hold a class discussion about advertising. Tell students that advertising is a big business and that often, the advertisements that they see on TV cost more to produce than the shows they sponsor. For example, in 2005, some companies paid more than $80,000 per second for advertising during the 2005 Super Bowl. 2. Ask students to name all of the different kinds of advertising they can think of such as radio, TV, internet, newspapers, magazines, signs, mailings, telephone book, product licensing, brochures, coupons, flyers, clothing logos, etc.

printable version | email a friend Truth-in-Advertising Show and Tell Have children bring in tobacco ads and other promotional items. What do the ads really want you to do? What is their message and what methods do they use to communicate that message? Encourage children to bring in medical journals and invite a doctor to come in to talk about the pharmaceutical ads in these magazines. Which ads depict illnesses caused by tobacco use? Compare the ads for prescription drugs with the tobacco ads. Many big businesses are profiting from tobacco-related illnesses. What are the political and economic ramifications? Invite children to bring in an ad that tells the truth about its product. Such an ad will communicate clearly what the product is, what it does, maybe how it works, and how it will benefit the user. Who are they trying to reach and how are they doing it? How does this ad differ from the tobacco ads?