Advertising Budget


DEFINITION of 'Advertising Budget'

An estimation of a company's promotional expenditures over a period of time. An advertising budget is the money a company is willing to set aside to accomplish its marketing objectives. When creating the advertising budget, a company must weigh the trade-offs between spending one additional advertising dollar with the amount of revenue that dollar will bring in as revenue.

BREAKING DOWN 'Advertising Budget'

Companies can determine what level to set their advertising budget several different ways, each of which has its positives and negatives. A business can set its budget as a percentage of sales, at the same level as its competitors, as the amount required to meet a certain objective, as the entirety of its profits or as a function of the units of product it wants to sell among others.

  1. Parasitic Advertising

    A type of marketing that promotes one product at the cost of ...
  2. Tailored Advertising

    Marketing and advertising campaigns that place emphasis on the ...
  3. Scrambled Assortment

    A merchandise assortment strategy in which a company carries ...
  4. Accelerated Reply Mail - ARM

    An expedited delivery of business reply mail offered by the U.S. ...
  5. Infomercial

    A form of television advertisement that acts as a stand-alone ...
  6. Law Of 29

    A belief held by some marketers that on average a prospective ...
Related Articles
  1. Stock Analysis

    This Is Why Instagram Is Winning Over Flickr

    Learn about Instagram's and Flickr's business models. Understand why Instagram has been winning over Flickr and why that trend is likely to continue.
  2. Fundamental Analysis

    An Inside Look at Pinterest's Business Model

    Learn about Pinterest and the type of company it is trying to become. Understand the company's business model and what makes it unique.
  3. Stock Analysis

    How Much Coca-Cola Spends on Advertising

    Learn about Coca-Cola's ad spending and why the company has decided to spend the amount of money it does. Understand comparable companies and industries.
  4. Professionals

    Advertising, Crocodiles And Moats

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

    How To Target Ideal Customers

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

    10 Breakout Ideas For Small Businesses

    If your business has hit a wall, we've got the answer to break through and increase sales and earnings.
  7. Professionals

    The Lucrative World Of Third-Party Marketing

    Hedge funds don't sell themselves. Marketing experts reel in the big fish.
  8. Entrepreneurship

    3 Ways You Can Support Small Business Growth

    Discover a number of different options available to support small business growth, including crowdfunding campaigns and shopping locally.
  9. Professionals

    Advisors: Do You Need to Tweak Your Marketing?

    Advisors use a variety of marketing techniques to attract clients, but they don't all work. It may be time to evaluate what is, and isn't, successful.
  10. Stock Analysis

    Are the Brands Millennials Love a Good Buy?

    Millennials make up a very big — and thus important —c onsumer generation. So if they love a brand, its stock is likely to outperform, right?
  1. Why do ETFs have fees?

    An exchange-traded fund (ETF), like any other company, has operating costs that it incurs as a result of conducting business. ... Read Full Answer >>
  2. Do nonprofit organizations have working capital?

    Nonprofit organizations continuously face debate over how much money they bring in that is kept in reserve. These financial ... Read Full Answer >>
  3. Is a financial advisor allowed to pay a referral fee?

    A financial advisor is allowed to pay a referral fee to a third party for soliciting clients. However, the Securities and ... Read Full Answer >>
  4. What are some examples of general and administrative expenses?

    In accounting, general and administrative expenses represent the necessary costs to maintain a company's daily operations ... Read Full Answer >>
  5. How does a long tail become profitable?

    A long tail becomes profitable because the costs to produce, market and distribute a product or service in a niche are low, ... Read Full Answer >>
  6. What are average operating expenses for the oil and gas sector?

    The oil and gas sector plays an important role in the economy by drilling, extracting, and processing oil and gas. Because ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  2. Barefoot Pilgrim

    A slang term for an unsophisticated investor who loses all of his or her wealth by trading equities in the stock market. ...
  3. Quick Ratio

    The quick ratio is an indicator of a company’s short-term liquidity. The quick ratio measures a company’s ability to meet ...
  4. Black Tuesday

    October 29, 1929, when the DJIA fell 12% - one of the largest one-day drops in stock market history. More than 16 million ...
  5. Black Monday

    October 19, 1987, when the Dow Jones Industrial Average (DJIA) lost almost 22% in a single day. That event marked the beginning ...
  6. Monetary Policy

    Monetary policy is the actions of a central bank, currency board or other regulatory committee that determine the size and ...
Trading Center