Page 493 - Foundations of Marketing

460 Part 6 | Promotion Decisions

advertising appropriation if the advertisements communicate information that consumers do not deem important when
The advertising budget for a selecting and using the product.
specific time period

objective-and-task Determining the Advertising Appropriation
approach Budgeting for an
advertising campaign by first The advertising appropriation is the total amount of money a marketer allocates for advertis-
determining its objectives and ing for a specific time period. For instance, Panera Bread Co. spends approximately 1.5 percent
9
then calculating the cost of all of its annual sales on advertising. Many factors affect a firm’s decision about how much to
the tasks needed to attain them appropriate for advertising. Geographic size of the market and the distribution of buyers within
the market have a great bearing on this deci-
sion. Both the type of product advertised
and the firm’s sales volume relative to com-
Most Expensive Advertising Spots petitors’ sales volumes also play roles in
determining what proportion of revenue to
spend on advertising. Advertising appropria-
$600. 000
Snapshot $400. 000 340,825 330,908 320,940 296,002 286,131 276,690 275,573 small relative to product sales, whereas con-
$545,142
tions for business products are usually quite
$500. 000
sumer convenience items, such as the cos-
metics sold by L’Oréal, generally have large
advertising expenditures relative to sales.
$300. 000
Retailers like Walmart usually have a much
$200. 000
lower percent of sales spent on advertising.
$100. 000
ad spenders across the world.

$0
Of the many techniques used to deter-
NBC FOX ABC FOX FOX FOX The FOX CBS Big Table 16.1 shows the top 10 fastest growing
Sunday American Idol Modern New Girl American Idol Simpsons Family Guy Bang Theory mine the advertising appropriation, one of
Night (Wednesday) Family (Thursday)
Football the most logical is the objective-and-task
approach . Using this approach, marketers
determine the objectives a campaign is to
Source: Brian Steinberg, “TV Ad Prices: ‘Idol’ No Match for Football,” Advertising Age , October 21,
achieve and then attempt to list the tasks
2012, http://adage.com/article/media/tv-ad-prices-idol-match-football/237874/ (accessed February 16,
2013). required to accomplish them. The costs of
Table 16.1 Ten Fastest Growing Global Ad Spenders
Advertising Percentage Growth
Rank Company Expenditures from Previous Year
1 Samsung $ 881 million 58 %

2 Amazon 1.1 billion 47
3 IAC 547 million 43

4 Lions Gate 418 million 43

5 AbbVie 481 million 41
6 Discover 603 million 30

7 Dish Network 469 million 29

8 Honda 1.2 billion 29

9 Kia 637 million 27
10 T-Mobile 1.1 billion 27
Source: Ad Age DataCenter estimates of total U.S. ad spending (measured media plus unmeasured spending) in 2012.
Highest growth rates among 100 LNA.

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