Promotion 427
In fact, a budget is not an amountof money,
as in colloquial usage, but a planfor spending it,
as in the annual ‘budget speech’ by the UK
Chancellor of the Exchequer. It describes sour-
ces and uses of funds over a given future
period, normally a year. By demanding for-
ward planning, providing an integrated
framework for operational decisions, and
establishing quantifiable standards of cost-
effective performance, it formalizes controlover
expenditure. If a statement of the promotional
appropriation is not accompanied by such a
plan for spending it, there is far too much scope
for profligate waste of scarce funds in a
business that is notoriously image conscious
and fashion led. As a noted author from within
the business remarks in a book significantly
titledAccountable Advertising:
It is no longer enough for the marketing
director to determine how much it is right to
spend on advertising... [he or she] still has to
make this decision but must now do more –
justify it.
(Broadbent, 1997, p. xv)The most crucial control mechanism in a
promotional budget will be the cost-effective-
ness criteria it specifies. The tedious but
straightforward process of recording all the
many costs attributable to a campaign pre-
sents no practical difficulties. However, reli-
able measures of its effectiveness are rarely
encountered in practice beyond the direct
marketing and advertising disciplines. Even in
those two cases, criteria are severely limited.
The success or failure of a direct marketing
initiative is normally reported in terms of
coupon returns, enquiries or off-the-page
orders; its communicative efficacy is seldom
tested in any way. Advertising effectiveness is
typically measured by criteria such as aware-
ness, recall, attitude change and sales move-
ments. Yet there has never been convincing
proof that the first three actually increase the
probability that the audience will subse-
quently take appropriate action, while the
fourth makes dubious assumptions about
short-term cause and effect. Those arguments
will be taken up later in this chapter. Mean-
while, we have to conclude that promotional
expenditure may be scrutinized and con-
strained, but is not controlled in any mean-
ingful sense of the word. Readers interested in
pursuing the issue of budgetingfurther should
consult Broadbent’s excellent ‘handbook for
managers’, cited earlier, mentally converting
from advertising to the rest of the promotional
mix as necessary. The rest of this section will
concern itself with appropriation setting.
Almost 30 years ago, Rees (1977) and
Dhalla (1977) independently found that, in the
UK and the USA respectively, advertising
managers and brand managers typically made
an initial bid for an adequate appropriation in
competition with other claimants on total funds
set aside for marketing, but that the ensuing
decision process was notably hierarchical.
Heads of each major marketing function having
negotiated for their slice of the pie, the board of
directors would debate the merits of their cases.
Vested interests could then result in further
bargaining. Almost invariably, the chief execu-
tive retained sole authority for final approval,
and those decisions were duly transmitted back
down the organization to those answerable for
using the various appropriations productively.
The generally political nature of this proc-
ess was confirmed a decade later in Britain by
Piercy (1987), and there is no reason to suspect
any significant change since then. Nevertheless,
textbooks typically imply that the advertising
appropriation (the only one they generally
consider within ‘promotion’) is indeed set by
those responsible for spending it. The neglected
reality that they have no such authority to set
their own budget has a crucial impact on
strategic planning: a ceiling is imposed on
spending which may bear little relationship to
promotional objectives or the firm’s situation
relative to the competition.
Whoever actually decides the amount to
be spent on advertising is likely to use one or
more of a set of well-known standard meth-
ods. Non-standard nomenclature disguises the