Determining the budget for your advertising campaign allows you to not only reach your target audience, but also get the greatest return on your investment.
Every advertising agency fixes its budget before undertaking a promotional campaign.
Read on to know how to decide your budget before launching an advertising campaign.
Find out the target audience Every product targets a specific audience.
You must fix the budget after finding out the target audience, who will benefit from your product.
It is vital to find out the demographics of the consumer (age, employment status, standard of living, etc.
).
Compose a consumer profile to get an idea of the buyer.
Study your competitor Study your competitor to know how they are advertising.
Your competitors will give you an idea how much to spend for a particular campaign.
See how much money they are spending on a similar product before fixing a budget.
Choose the right media Advertising budget depends largely on the kind of media you choose to reach your audience.
Each media platform, radio, television and print, has its own set of charges.
Cost also depends on where and when you are placing an ad.
An inner page newspaper ad is less expensive than a front-page ad.
Similarly, slating an ad during prime time slot is more expensive than other slots.
Find out which media will best serve your purpose of reaching a range of audience.
Today, the Internet has also evolved as an effective medium for advertisers.
Google and Facebook ad campaigns are quite effective to reach your customer.
Forecasting percentage of sales Forecasting sales percentage will give you an approximate idea of your budget.
However, there is a certain risk element in this approach.
Failing to achieve your target will result in financial loss.
Nevertheless, experienced advertisers do take this risk and are successful more often than not.
Set the maximum amount you wish to spend If you have a solid cash flow, then use this method to fix your budget.
Decide on a particular amount and divide it among different advertising mediums.
However, if your company is a startup, go for objective based method.
Set an objective and figure out the cost.
Time Advertising budget depends a lot on the timing of your campaign.
Placing an ad during mega events such as Olympics and World Cups will be more expensive than other times of the year.
Readership and viewership jumps up during big events, which increases promotional costs.
Test the waters beforehand and explore new avenues to enhance the effectiveness of your campaign.
At first set a small budget and gradually increase as and when required.