Advertising Allowance

AAA

DEFINITION of 'Advertising Allowance'

Money that a product manufacturer or service provider pays to a retailer to get the word out about a product. The company may establish requirements for the retailer to receive the allowance, such as getting the company's approval of the advertisement before it is displayed and providing proof that the advertisement was made.


By helping the retailer pay its advertising costs, the company's advertising allowance gives the retailer an incentive to carry that product.

INVESTOPEDIA EXPLAINS 'Advertising Allowance'

For example, let's say an educational toy store carries a board game that helps children learn about personal finance. The toy store publishes a quarterly catalog in which it advertises the board game by showing a photo of children playing the game and providing a one-paragraph description of the game. The board game manufacturer would typically pay an advertising allowance to the toy store to help offset the expense of marketing the board game in the catalog. These expenses might include a fraction of the catalog's printing and mailing costs or discount in the board game's wholesale cost.

RELATED TERMS
  1. Word-Of-Mouth Marketing - WOM Marketing

    When a consumer's interest for a company's product or service ...
  2. Brand Loyalty

    When consumers become committed to your brand and make repeat ...
  3. Market Share

    The percentage of an industry or market's total sales that is ...
  4. Masterbrand

    A specific overarching brand name that serves as the main anchoring ...
  5. Brand Equity

    The value premium that a company realizes from a product with ...
  6. Patent

    A government license that gives the holder exclusive rights to ...
RELATED FAQS
  1. No results found.
Related Articles
  1. Home & Auto

    Don't Be Misled By Investment Advertising

    Investment companies and brokers want to sell. Unfortunately, this can result in promotional material that is not entirely frank, or far worse, truly misleading.
  2. Fundamental Analysis

    The Green Marketing Machine

    Don't let corporations greenwash their dirty laundry. Learn how to spot a phony.
  3. Professionals

    Advertising, Crocodiles And Moats

    Memorable advertising is a brick in the fortress that keeps competitors at bay.
  4. Professionals

    How To Target Ideal Customers

    Expand your definition of a lucrative client and uncover a new realm of possibilities.
  5. Entrepreneurship

    Small Business: It's All About Relationships

    Rather than be a jack-of-all-trades, an owner should rely on a network of trusted experts.
  6. Professionals

    The Marketing Director's Pitch

    Are your shoulder's wide enough to carry a company's reputation?
  7. Retirement

    Generational Marketing: Harvest The Whole Family Tree

    Attract new clients by tailoring your message to specific age groups.
  8. Investing

    Multiple Myeloma: A Growing Market For Treatment

    American and European regulators have given Celgene Corporation the OK to begin marketing its top-selling myeloma drug Revlimid as a first-line therapy.
  9. Investing

    Advertising From TV To Internet: An Industry History

    Changes in television consumption habits have forced advertising to target audiences through new means, namely Internet advertising.
  10. Personal Finance

    How Pinterest Makes Money

    Unlike other social platforms, Pinterest actually caters to people who want more stuff.

You May Also Like

Hot Definitions
  1. Technical Skills

    1. The knowledge and abilities needed to accomplish mathematical, engineering, scientific or computer-related duties, as ...
  2. Prepaid Expense

    A type of asset that arises on a balance sheet as a result of business making payments for goods and services to be received ...
  3. Gordon Growth Model

    A model for determining the intrinsic value of a stock, based on a future series of dividends that grow at a constant rate. ...
  4. Cost Accounting

    A type of accounting process that aims to capture a company's costs of production by assessing the input costs of each step ...
  5. Law Of Supply

    A microeconomic law stating that, all other factors being equal, as the price of a good or service increases, the quantity ...
  6. Investment Grade

    A rating that indicates that a municipal or corporate bond has a relatively low risk of default. Bond rating firms, such ...
Trading Center