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Advertising and promotion budgeting during volatile economic conditions: factors influencing the level of decentralisation in budgeting and its relations to budget size and allocation
Yunjae Cheong, Kihan Kim and Hyuksoo Kim, International Journal of Advertising, Vol. 32, No. 1, 2013, pp. 143-162
This paper provides a perspective on traditional budgeting approaches and managerial processes in the midst of the severe economic downturn during May 2009, in the United States.
This paper provides a perspective on traditional budgeting approaches and managerial processes in the midst of the severe economic downturn during May 2009, in the United States. Specifically, it examines the extent to which various company, brand and organisational factors are related to the level of decentralisation in the budgeting for advertising and promotion. Also, the influences of the level of decentralisation in the budgeting on the marketing budget size and the advertising-to-promotion ratio were examined. It appeared that the company size, company profitability, brand equity, brand price, brand type and the influences of the marketing and the finance departments were associated with the level of decentralisation in the budgeting, which, in turn, had significant impact on the actual budget size and allocation
Share of voice/share of market and long-term advertising effects
Lars Bech Christensen and Flemming Hansen, International Journal of Advertising, Vol. 24, No. 3, 2005, pp. 297-320
In this paper we focus on analysing relationships between share of voice and share of market for a wide variety of fmcg product categories, in the conceptual framework of John Philip Jones’ Advertising Intensiveness Curve.
In this paper we focus on analysing relationships between share of voice and share of market for a wide variety of fmcg product categories, in the conceptual framework of John Philip Jones’ Advertising Intensiveness Curve. Data used are single-source. We show that the general relationship of a relatively larger share of voice for smaller brands and a relatively smaller share of voice for larger brands holds true. We also analyse how the level of advertising in product categories affects this relationship, and how the level of competition in the product categories alters the Advertising Intensiveness Curve.
Comparing the Current Effects and Carryover of National-, Regional-, and Local-Sponsor Advertising
William A. Dempsey and J. Duncan Herrington, Journal of Advertising Research, Vol. 45, No. 1, Mar 2005, pp. 60-72
Coordinating and controlling advertising strategy within contractual and administered vertical marketing systems (VMSs) can be a complex task given the number of channel members involved in the process.
Coordinating and controlling advertising strategy within contractual and administered vertical marketing systems (VMSs) can be a complex task given the number of channel members involved in the process. Quite often thousands of intermediaries are involved at different levels each with their own objectives and areas ofresponsibility. Conflict within a VMS can arise when dealers/distributors consider the advertising efforts of the sponsoring organization to be ineffective and vice versa. One of the major issues involves how to allocate the advertising budget throughout the VMS so as to generate the greatest return. To this end we report the results of a study comparing the current and lagged effects of national-sponsor advertising to that of local and regional sponsors within one of the more prominent contractual VMS in the United States—the automobile industry. Using a direct aggregation approach to model advertising carryover at both the industry and individual brand level provides useful information for making decisions regarding the allocation of advertisingbudgets.
The case for greater agency involvement in strategic partnerships
Kimberly A. Taylor and Judy Harris, Journal of Advertising Research, Vol. 43, No. 4, December 2003, pp. 346-352
Many marketing scholars and practitioners would agree that the ideal relationship between a client and its advertising agency is that of a strategic partnership.
Many marketing scholars and practitioners would agree that the ideal relationship between a client and its advertising agency is that of a strategic partnership. Yet, one element of the strategic marketing planning process—the setting of the advertising budget—still remains relatively uninfluenced by agency input. In this article, we discuss why agencies traditionally have had little input into the budget-setting process. We draw upon qualitative interviews with top marketing managers to provide insight into the agency/client relationship and identify seven factors likely to influence the extent of agency participation in budget setting. Ways in which clients and agencies can work together to increase agency participation are also discussed.
Estimating advertising effects on sales in a competitive setting
Rujirutana Mandhachitara and Boonghee Yoo, Journal of Advertising Research, Vol. 43, No. 3, September 2003, pp. 310-321
Over the last several decades, advertising effects on sales have been studied without appropriately taking into consideration competitors' advertising activities.
Over the last several decades, advertising effects on sales have been studied without appropriately taking into consideration competitors' advertising activities. As a result, advertisers often instinctively match competitors' spending proportionately when it is monitored. The weakness of such a competitive parity approach is that they implicitly assume zero-sum competition only. This study identifies a variety of competitive conditions under which better budgeting strategies can be formulated. Specifically, four types of competition are conceptualized based on how an advertiser and its competitors affect each other's sales according to level of media advertising spending. In addition, appropriate strategies for setting advertising budgets to deal with each situation are discussed. A mathematical method is developed to measure advertising effectiveness for both the advertiser and competitors on sales of a focal brand. The method computes current and carryover effects, identifies in which type of competition the advertiser is operating, and, accordingly, determines which budgeting strategy best suits the situation. In an empirical illustration, the method was applied to data collected monthly over eight years. The analyzed product was Scotch whisky sold in Thailand.
Advertising productivity: developing an agenda for research
Sridhar Ramaswami, John Kim and Mukesh Bhargava, International Journal of Advertising, Vol. 20, No. 4, 2001
Despite its importance, research on advertising productivity is limited and fragmentary. This article consolidates the major research streams on different facets of productivity.
Despite its importance, research on advertising productivity is limited and fragmentary. This article consolidates the major research streams on different facets of productivity. This consolidation allows us to identify and prioritise various issues that need to be addressed, and thereby develop a comprehensive research agenda for this area.
Qualitative Research: Setting Advertising and Promotion Budgets in Multi-Brand Companies
George S Low and Jakki Mohr, Journal of Advertising Research, Vol. 39, No. 1, January/February 1999
This study, based on depth interviews with 21 experienced frontline brand managers and high level senior managers, focuses on improving the understanding of the advertising and sales promotion budget allocation decision and identifying factors that enhance or impede effective decision making, in the USA.
This study, based on depth interviews with 21 experienced frontline brand managers and high level senior managers, focuses on improving the understanding of the advertising and sales promotion budget allocation decision and identifying factors that enhance or impede effective decision making, in the USA. Using qualitative techniques, illustrated with verbatim quotes, it concludes that advertising and sales promotion budgeting continues to be a perplexing issue for advertising and brand managers - and that most felt that institutionalised pressures led to a greater proportion of their marketing budget being spent on sales promotions than they would have liked.
A report on the max project
Mike Donahue, International Journal of Advertising, Vol. 17, No. 4, 1998
This paper reports on the progress of a joint project between the AAAA and the Management Science Institute designed to communicate to CFOs and CEOs that a great deal is known about the effective management of advertising expenditure.
This paper reports on the progress of a joint project between the AAAA and the Management Science Institute designed to communicate to CFOs and CEOs that a great deal is known about the effective management of advertising expenditure. The project aims to identify best practice in how advertising expenditures are budgeted and evaluated.
Turning Research into Return-on-Investment
Mike Mondello, Journal of Advertising Research, Vol. 36, No. 4, July/August 1996
Describes how Celestial Seasonings Inc. uses market research to improve return on investment: 1) using existing studies on profitability to determine how the marketing budget should be allocated; 2) a 'total quality' approach to test and monitor TV advertising.
Describes how Celestial Seasonings Inc. uses market research to improve return on investment: 1) using existing studies on profitability to determine how the marketing budget should be allocated; 2) a 'total quality' approach to test and monitor TV advertising. The ARS persuasion-shift system is used and recommended.
The Financial Implications of Advertising as an Investment
John B. White and Morgan P. Miles, Journal of Advertising Research, Vol. 36, No. 4, July/August 1996
Proposes that advertising should be analysed within a framework of capital budgeting and treated as an investment.
Proposes that advertising should be analysed within a framework of capital budgeting and treated as an investment. Various recent studies and approaches to budget-setting reviewed. A break-even model to evaluate advertising expenditure is proposed, described and illustrated. The model depends on the profit margin, the decay rate of the advertising effect and the discount rate.
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