Kerimova C.V., Financial University under the Government of Russian Federation

Situation analyses as a stage of planning and budgeting of advertisement campaigns

Planning an advertising campaign involves a gradual process of creating and maintaining marketing communications designed to change knowledge, attitudes and behavior of target audiences in order to achieve marketing objectives. This process includes setting goals, planning activities aimed at achieving these goals, implementing plans into practice and monitoring their realization.

A document that defines the order of the promotional activities of the advertising campaign for a certain period of time is an advertising plan. It is opened by a sheet of assertion, table of contents and a brief introduction, explaining the reasons and purpose for developing this plan. The plan of advertising, in our view, should include the following sections:

1. Analysis of the situation.

2. Strategic decisions.

3. The order and time-limits on development and creation of advertising.

4. The sequence of the media.

5. Analysis of results of performance.

6. Financing.

First section of the plan has the great importance for the ultimate success of planned activities. This equally applies to the quality of preparation of its content, and to the fullness of its subsequent execution. Situational analysis involves collecting, recording, organization and investigation of a wide range of information relevant to the advertised product.

The most significant factors, affecting the advertising projects, are:

· total market share and position the organization-advertiser;

· marketing strategies for the organization of the market, product lines, competitors and consumers;

· the role of advertising in a complex marketing communications to be used in an advertising campaign;

· profit margins and sales volume;

· competitors’ expenditures;

· financial resources of the organization.

The size of the market for traditional products distribution is quite stable. However, in case of a promotion of a new product or expanding sales, market size remains to be assessed.

The role of advertising in a complex marketing communications has an enormous influence on the budget. The greater the role of advertising in the campaign of promotion is, the greater will be the size and advertising budget. An important factor that directly affect on the amount of planned expenditures is the amount of funds that should be allocated for the implementation of multidirectional advertising (for different target audiences). For example, a bank’s target audience consists of individuals and entities, so, each direction needs its own communication flow, in fact, two-way campaign in a means of advertising, because the structure of the advertising message and the character motivations are different.

The magnitude of advertising budget depends on the product life cycle, brand and the organization-advertiser. New products tend to require more intensive advertising. The cost of product output of the new brand on the market with a high degree of competition can absorb the entire gross profit the first year. Formation of awareness about the brand among the buyers, including the trial period, sales and establishment of a network of retail distribution, requires a large initial expenditure on advertising and sales promotion.

Advertisement expenditures do not guarantee the expected returns; the level of cost competition is not always the sole determining factor. But the share of attention, for which the competition is, correlated with the market share, this factor should not be overlooked.

The most obvious limiting factor in the size of advertising budget is the amount of financing funds. The cost to enter the national market in many product categories is very high; few organizations have sufficient financial resources.

During planning and budgeting advertisement projects the analytics face with many risks and problems that can affect the campaign efficiency:

Ø an error in the choice of target audience;

Ø initially weak conceptual idea of advertising;

Ø ineffective performance of advertising;

Ø incorrect organization of advertising.

Despite their specificity, these problems are closely related. Thus, the error in the choice of target audience, linked, for example, to over-estimate the solvency of potential buyers or their attention with emphasis on the qualities of products that are not crucial for most of the audience will inevitably impact on the development of promotional ideas. Perhaps this idea will actually be brilliant - an original, attractive, but most of the audience will not initially see it as "their" - addressed to them.

On the other hand, imagine that the idea of advertising is designed flawlessly. However, due to its disastrous performance such advertisement probably will not attract enough attention from potential buyers of the advertised product. It can be caused by ineffectual decoration or implementation.

Finally, the excellent performance of advertising can get lost in the media if it is placed on the page or on the air in "wrong" channels of distribution - consumers simply "will not find" this advertisement. And in the end, unfortunately, it turns out that the money of customers and developers of intellectual resources are wasted.

It’s also important to remember that advertising (no matter how brilliant it was produced and distributed) is still not omnipotent. In particular it applies to the characteristics of such goods or services, such as cost, - truthful advertising will never be able to reduce it to a certain number of rubles in favor of the buyer. However, through an objective and compelling story about the merits of the goods or services advertisement can convince the buyer that asking price of product is not too high because of obvious advantages of the advertised product.