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Methods of Planning Media Budget

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Abhijeet S
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Methods of Planning Media Budget - October 11th, 2010

Task Objective Method - This is just a way of saying, how much you have to spend to reach your objective. For example, you want to reach 50 percent of your audience. How many people do you have to reach? How many times do you have to run an ad? How much does each ad cost?


It identifies how much and what kind of media can be purchased at various budget levels. It selects a level that buys what is desired for the brand. Tracking past results and replicating past successes represents another way of pricing the brand's ad budget.


Historical Method - This method uses a base budget and then increases the budget each year by a certain percentage. For example you have $10,000 to spend this year, then next year you increase it 5% to be $10,500.


Percent-of-Sales Method - For this, you can take a percentage of your sales as your advertising budget. The tricky thing is that you have to forecast your sales. Here is the formula to help you along:


Step 1: Past Advertising Rupees = % of Sales


Past Sales


Step 2: % of Sales X Next Year’s Sales Forecast = New Advertising Budget
(Average advertising budget will run about 20% of your sales.)


Combination Method - You are never stuck with one method. Many companies chose multiple methods and pick a plan that is right for them. You need to evaluate your situation. How much can you afford and what will it take to reach your objectives?
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