Advertising budget

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The advertising budget is the total amount of money the advertiser wishes to invest in the implementation of an advertising campaign. To determine the amount to allocate to the campaign, the advertiser can choose between different methods. One of them is to define the budget taking into account the advertising objectives set and the means implemented to reach them.

Another method proposes to calculate the budget according to a single important criterion, the company’s projected turnover. For the advertiser, the more likely a product is to appeal, the greater the advertising effort should be. The calculation is therefore based on potential sales and not on realized sales.

The third method is for the advertiser to calculate its advertising budget in proportion to what its competitors have already spent in the market. This is the technique of the share of voice. This technique requires the advertiser to invest more than its competitors in its advertising campaign, in order to gain market share.