A Flexible Budget
Any combination of these methods may be employed in the formation and allocation of your advertising budget. All of them – or simply one – may be needed to meet your advertising objectives. However you decide to plan your budget, it should be a flexible budget, capable of being adjusted to changes in the marketplace.
The duration of your planning and budgeting period depends upon the nature of your business. If you can use short budgeting periods, you’ll find that your advertising can be more flexible and that you can change tactics to meet immediate trends.
To ensure advertising flexibility, you should have a contingency fund to deal with special circumstances – such as the introduction of a new product, specials available in local media, or unexpected competitive situations.
Beware of your competitor’s activities at all times. Don’t blindly copy your competitors, but analyze how their actions may affect your business – and be prepared to act.
Your first budget will be the most difficult to develop – but it will be worth the effort. The budget will help you analyze the results of your advertising. By your next business year you’ll have a more factual basis for budgeting than you did before. Your plans will become more effective with each budget you develop.