How Does Market Conditions Affect The Advertising Budget

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Advertising Budget is the amount of money which has to be spent on advertising for a brand to promote it, help reach its target audience and rake in profits for the company.
But before the advertising budget is decided upon for a company, one has to take a note of the favourable and unfavourable market conditions which will have a direct impact on the advertising budget. The following are the conditions that have a direct impact on the advertising budget.
1. Frequency of the Advertisement
This means the number of times advertise has been shown with the description of the product or service, in the granted time slots. So here, if any company needs more advertising frequency for its product, then the company will have to increase its advertising
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Market Share
To get a good market share in comparison to their competitors, the company should have a better product in terms of quality, uniqueness, demand and catchy advertisements with resultant response of the customers. All this is possible if the advertisement budget is high.
4. Product Life Cycle Stage
If the company is a newcomer or if the product is on its introduction stage, then the company has to keep the budget high to make place in the market with the existing players and to have frequent advertisements. As the time goes on and product becomes older, the advertising budget can come down as then the product doesn’t need frequent advertising.
When the market conditions are studied thoroughly, then the company has to set up its advertising budget accordingly. For setting advertising budget, there are four methods:
They are as follows.
 Percentage Of Sales: In this method, the budget is decided on the basis of the sales of the product from previous year records or from the predicted future sales. This is a pure prediction based method and best applicable to the companies which have fixed annual sales. But if in case there is a requirement for more promotional activities then this method has a disadvantage because there will be decrease in advertisements as the budget is
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searching for best market conditions and setting the best advertising budget will have a great impact on improvement and development of the company.
5.Time of airing
Television has various time slots depending upon viewership. Depending on the popularity (measured in TRPs) of shows in different time bands, the rates for advertising differ. Since a prime time ad will have more viewers, it is more expensive as compared to a non-prime time ad. Therefore, if your ad is not aired in your chosen slot, you lose on viewership and hence your ad fails to create an impact on your target audience.
6.Ad Duration
Producing television ads is an expensive affair. You have just a few seconds to deliver the message to your audience. Hence, it is vital to ensure that your entire advertisement is aired without any cuts. Sometimes, channels fail to air the entire ad and this is a loss for the advertiser. This happens mainly during live telecasts such as sporting events or breaking news. It is important that the channel makes good of the cut short ad and re-airs the same at a mutually agreed

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