What Are the Different Parts of an Advertising Budget?

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  • Written By: Malcolm Tatum
  • Edited By: Bronwyn Harris
  • Last Modified Date: 05 November 2018
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Structuring an effective advertising budget calls for taking into consideration all the different aspects of public relations and promotion that company owners believe will reach the right sectors of the consumer market, identifying the amount of money that can be spent on the advertising, then designing the budget within those limitations. Since different forms of advertising are effective for various business models, the exact components or parts of the budget will change from one business to the next. In general, the parts of an advertising budget will identify the types of promotion that company owners have decided are most critical to earning more customers and determining how much in the way of financial resources can be devoted to each one.

An advertising budget will typically include sections that have to do with different forms of advertising. For example, a local business may include one section that is focused on print advertising costs, including ads in local newspapers and other locations. A second section may focus on media advertising, such as ads for radio and television that help to reach local customers. The small business may also set aside a section that is devoted to Internet advertising, allowing for the costs of developing and operating one or more web sites, as well as covering the costs of banner ads and other online advertising opportunities.


The scope of sections included in an advertising budget will also include allotments for the development and distribution of printed materials such as brochures and other promotional material that is distributed through the post. Along with general brochures, the printed collateral section of the budget may also allow for implementation kits for new customers, funds to manage mail campaigns announcing new product offerings to existing clients, and even the cost of preparing printed matter for use at trade shows and conventions.

One section that is often overlooked when preparing an advertising budget is trade show participation. This section makes it possible to budget for attendance at one or more shows during the budget year. Costs such as the registration and booth rental fees, the costs of shipping materials to the site of the show, and even the travel costs of sending employees to set up and manage the booth during the event may be accounted for in this section.

With any advertising budget, it is important to tailor the sections so that the expenses are focused on any methods that are likely to generate the best returns in terms of new customers or gaining additional business volume from existing ones. The actual structure of the budget will depend on the nature of the business operation, the targeted consumer markets, and the amount of resources the business can reasonably devote to the advertising effort. Keeping these factors in mind makes it easier to use tailored advertising techniques that have a high probability of generating returns that justify the total expense assigned to the budget.



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