International advertising budgeting practices

A good product is like having no product at all unless information about it is communicated to the target consumer group, and a company without products cannot survive. It is therefore not a question of whether the company should communicate with the market or not, but how the company can communicate with the market as efficiently as possible. There is very little guidance available to the practitioner in this area: the absence of accounting standards for advertising and promotion costs and a lack of communications knowledge make it hard to know whether too much is spent or not enough. Academic research has shown that there has been an increased use of the objective and task method over the years, which indicates an increased degree of sophistication. Looking into more details about advertising and promotion budgeting, however, shows that most companies have to rely on approximations of the objective and task method. The technological development that would allow consumer product companies to establish a cause-effect relationship between advertising and sales has not been introduced in Sweden yet, and only large companies will be able to afford to use the method in the future. On the whole, one can conclude that academic recommendations on theoretically sound budgeting practices lie one step ahead of what is possible for the practitioners to accomplish.