Advertising Budget - Expert Opinion Method (A&BM 01Oct2020)

Advertising Budget

 

(5) Expert Opinion Method:

Many marketing firms follow this method. Both internal and external experts are asked to estimate the amount to be spent for advertisement for a given period. Experts, on the basis of the rich experience on the area, can determine objectively the amount for advertising. Experts supply their estimate individually or jointly.

Along with the estimates, they also underline certain assumptions. Internal experts involve company’s executives, such as general manager, marketing manager, advertising manager, sales manager, distribution manager, etc.

Whereas external experts involve marketing consultants, dealers, suppliers, distributors, trade associations, advertising agencies, and other professionals related to the field. Marketing consultants and advertising agencies provide such services on professional basis.

Advertising budget recommended by external experts is more neutral (bias-free) and, hence, is reliable. Experts considers overall situation and give their opinion on how much a company should spend. Mostly, the experts consider all the relevant factors related to advertising while deciding on advertising budget.

 

Merits:

Expert opinion method offers following merits:

(a) The estimates tend to be more balanced as various executives and experts are involved.

(b) The budget is more accurate and realistic because the internal executives are well aware of company’s strengths and weaknesses.

(c) It is the only option when a company is new, having no past experience.

(d) External experts tend to be more neutral as they are external to organisation

 

Demerits:

However, the user must be aware of following possible demerits:

(a) It is not a scientific method. Personal value, experience, and attitudes play vital role.

(b) It is difficult to fix responsibility of the final estimates as many experts contribute to budget estimates.

(c) External experts are not fully aware of the company’s marketing situations.

(d) When more internal experts are involved, it may deteriorate relation due to possible conflicts or lack of consensus.

(e) Possibility of prejudice or bias cannot be ignored.

(f) All opinions, right or wrong, are given equal importance