Ad Campaign Scheduling (Flighting) and Budgets

An advertising campaign is a combination of ads scheduled over a period of time using a combination of media with coordinated schedules for the ad placement in those media to achieve specific progressive objectives. Flighting is the scheduled and patterned periods of advertising activity within the time period of an ad campaign.

An Ad campaign covers a selected time period within which you use a budget to achieve specific changes (objectives) in your target audience. To be effective we need to consider:

• Targeted Audience - and where they are in their purchase behavior, attitudes and habits for our product or service
• Set Objectives - over the time period for the campaign
• Available budget
• Flighting - patterned periods of advertising activity over the campaign timeline
• Information processing
  • Perception
  • Learning
  • Forgetting
• Frequency and repetition

It would be great, not to mention effective, to have an unlimited budget for advertising. We never do. In fact, most new business owners are reluctant to spend money on advertising...they get nothing immediate and tangible in return. At best, it feels like paying taxes.

BUT, nobody patronizes a business or buys products and services they have never heard of. Advertising is essential for all businesses with very rare exceptions. You can't build a business by relying on word of mouth only. So, if you are going to spend money on advertising, spend it effectively.

How do you determine your advertising budget?

To determine how much to spend on advertising, start by thinking in time periods...a year, a campaign timeline. A sound budgeting process can be followed such as the one suggested below. It also helps to see what other businesses spend on advertising.

Let's look at a budget process.

Budget Process

A budget process is just a few simple planning steps.

1) Review what other businesses of your size, as measured by sales, spend on advertising. Typically, you look at advertising expenditures as a percent of your gross sales, that is total sales before adjusting for returns and allowances. (definition sidebar)

The average percentage of retail gross sales spent on advertising in Santa Cruz County is 3% of sales.

Budget Process

1) Make a ballpark estimate of money available for advertising. Your budget may drive your objectives and strategies.

2) Create a strong media plan & assess its costs.

3) Compare your media plans costs to the budget.

4) Adjust the budget or the plan as appropriate.

Budgeting Methods

Affordable Method - spend what you can; little or no analysis.

• calculate your businesses expenses and desired profit level
• calculate revenue and subtract profit plus expenses
• what's left is your budget

Percentage of Sales Method - advertising is determined by sales volume (see chart above )

• take past (actual) and compare to future (projected) sales
  • the percent change in sales is the percent change in advertising budget
  • or apply target percent from chart to the new sales projection
• sometimes calculated as a standard then applied to a per unit demand forecast
• prevents overspending but may not be appropriate for new products needing extra spending to introduce them
• stabilizes market shares, no growth

Competitive Parity Method - mimic competition, little or no analysis

• get total industry advertising expenditures
• get total industry sales
• use % market share to calculate % of industry advertising dollars that should be yours
• promotes stability
• if you raise your share it promotes ad wars

Objective & Task Method - strategic budgeting by analysis

• define your objectives
• outline a strategy that will meet your objectives
• estimate the cost of performing each task in your strategy
• sum these to set your budget
• doesn't account for affordability