Value of Objectives
Focus and Coordination

They help to orient everyone involved
toward one, common goal.
Plans and Decisions

They serve as criteria for developing
plans and making decisions.
Measurement and Control

They provide the standards and
benchmarks for evaluating results.
Measuring Advertising
Effectiveness
Technology
Competition
The Economy
Advertising
SALES
Product
Quality
Distribution
Price
Problems With Sales Objectives
Many other variables may influence sales.
Advertising has a lagged effect.
Sales objectives offer little guidance to creative
and media people.
Where Sales Objectives May Work
In order of appropriateness:

Direct response
Where Sales Objectives May Work
In order of appropriateness:


Direct response
Retail special event
promotions
Where Sales Objectives May Work
In order of appropriateness:



Direct response
Retail special event
promotions
Mature & very stable
markets
Communications Objectives
Hierarchy of Effects Pyramid
5%
Regular Use
20% Trial
Conative
25% Preference
Affective
40% Liking
70% Comprehension
Cognitive
90% Awareness
Communications Objectives
Objective 1: Create brand awareness among 90% of
the target audience.
Objective 2: Create understanding of key brand
benefits among 70% of the target audience.
Objective 3: Create positive feelings about the brand
among 40% and preference among 25% of the target
audience.
Objective 4: Obtain trial among 20% of the target
audience.
Objective 5: Develop and maintain regular use
among 5% of the target audience.
The DAGMAR Approach
Define
Advertising
Goals for
Measuring
Advertising
Results
Characteristics of Objectives
Specific Communications Objectives
Concrete Measurable Tasks
Well-Defined Target Audience
Existing Benchmark Measure
Degree of Change Sought
Specific Time Period
Critique of Objectives
DAGMAR Difficulties
Legitimate Problems
Response Hierarchy
Problems

Doesn't always define the
process people use to
reach purchase/use.
Attitude - Behavior
Relationship

Attitude change doesn't
always lead to change in
actions or behavior.
Questionable Objections
Sales Objectives Are
Needed

Sales are all that really
counts, not
communications objectives.
Costly and Impractical

The research and efforts
cost more then the results
are worth.
Inhibition of Creativity

Too many rules and too
much structure curb genius.
Theoretical Issues in Budgeting
Concave-Downward Response Curve
Theoretical Issues in Budgeting
S-Shaped Response Curve
Theoretical Issues in Budgeting
Marginal Analysis
Gross Margin
Sales in $
Sales
Ad. Expenditure
Profit
Point A
Advertising / Promotion in $
Problems with Marginal
Analysis
Assumption:

Sales are the principal objective of
advertising and/or promotion.
Assumption:

Sales are the result of advertising and
promotion and nothing else.
Budgeting - Top Down
Historical Method
•May be based on last year’s with a
percentage increase.
Affordable Method
•Allocates whatever is left over to
advertising.
Percentage-of-Sales
•Compares total sales with the total
promotion budget during a previous
or projected time period.
Budgeting-Top Down
Arbitrary Allocation
Competitive Parity
•Budgeting by fiat.
•Matching the competition’s
percentage-of-sales expenditures.
Examples of ad-to-sales ratios
Airlines
1.2 % of sales
Soft drinks
5.3
Cable TV
1.3
Dolls
15.2
Food & kindred products
10.2
Steel works and blast furnaces 1.9
Watches, clocks and parts
13.7
Wine and brandy
11.3
Records, audiotape, disk
13.4
Plastic, resins
0.5
Budgeting-Bottom Up
Objective & Task Method
•Looks at objectives set for each
activity, and determines the cost of
accomplishing each objective.
1. Isolate Objectives
2. Determine Tasks Required
3. Estimate Required Capital Expenditures
4. Monitor
5. Reevaluate Objectives