Examining the Brief: Establishing
Objectives and Budgeting for the
Promotional Program
LECTURE 2
Lecture Outline
1. Setting Marketing Communication Objectives
-Marketing vs. Communications Objectives
-DAGMAR: An Approach to Setting Objectives
-SEE/THINK/DO/CARE Approach to Setting Objectives
Objective: Discuss setting objectives for advertising and promotion
2. Establishing and Allocating the Promotional Budget -
Approaches to setting Budget
Objective: Describe the process of budgeting for IMC
Marketing communication objectives
Don’t care how bright or how catchy … nor how much general
interest. The key is “does it sell?” What’s the profit of the ad
investment?
L. Thomas of Lord and Thomas, the largest U.S. ad agency in 1905
Communications objectives objectives tie the organization’s context,
target markets, and positioning approaches to the ultimate selection of
budget figures and IMC components (Clow and Baack 2018, p. 128).
Marketing communication objectives
◼ Include a precise statement of who, what and when.
“Raise brand awareness 10% for male 18-34 by Q4”
◼ Be quantitative and measurable.
“Achieve trial rate of 7% over next 3 months”
◼ Specify the amount of change.
“Convert 10% of one-time users to repeat users”
◼ Be realistic.
“Grow category sales by 5%”
◼ Be internally consistent.
“Meet/exceed company established benchmarks…”
◼ Consider budget constraints and effective use of IMC
tools in allocation of budget.
Setting achievable communication objectives
Marketing vs. Communication Objectives
▪ Communications objectives guide account executives and
advertising creatives in designing the actual advertising messages
▪ Communications objectives are derived from overall marketing
objectives.
Marketing objectives
▪ Sales volume
▪ Market share
▪ Profits
▪ Return on investment
Communications objectives
▪ To create or maintain brand
awareness.
▪ To change consumer beliefs or
attitudes.
▪ To influence purchase intent.
▪ To stimulate trial use.
▪ To convert one-time users into repeat
purchasers.
▪ To encourage brand switching.
Use of IMC tools in Customer Journey
How do consumers react to advertising efforts?
Awareness Consideration Attitude Trial Repeat
Consumer
Stages
Product-promoting
ads
Brand-building
ads
In-store
promotions
Brand-building
ads
LEARN FEEL DO DO/FEELType of
response
Communication
tools
Objectives
Goal 1: Market Share - Grow McDonald’s
share of the Smoothie category from 0% to
5% by Q3 2020.
Goal 2: Awareness & Trial - Meet/exceed
McDonald’s benchmarks for New Product
Launch, Awareness and Trial: 3-month goal.
Awareness = 70%
Tried Past 4 Weeks = 7%
Goal 3: Perceptions - Increase quality
perceptions significantly via communication
and interaction with product.
Strategic Challenge
How does McDonald’s, a burger and fry joint
with poor quality and health perceptions,
convince consumers to forgo the places
normally associated with great tasting
smoothies, and spend their discretionary
income on a product that is brand new
territory for the brand?
Use IMC tools for McD’s new smoothie
Where should McD invest $ in comms?
Awareness Consideration Attitude Trial Repeat
Consumer
Stages
Product-promoting
ads
Brand-building
ads
In-store
promotions
Brand-building
ads
LEARN FEEL DO DO/FEELType of
response
Communication
tools
Goals: How and where do we measure this?

DAGMAR: An Approach to Setting Objectives
Defining Advertising Goals for Measured Advertising Results (DAGMAR)
• Based on premise that communications effects are a logical basis for advertising goals
and objectives to measure success or failure.
• Communications tasks are determined by stage in consumer journey:
• Awareness.
• Comprehension.
• Conviction.
• Action.
DAGMAR: An Approach to Setting Objectives
Characteristics of Objectives
• Concrete and measurable tasks.
• Well-defined target audience.
• Benchmark and specify degree of change sought.
• Specified time period in which goals must be accomplished.
• Setting Objectives for the IMC Program based on
‘consumer decision journey’:
• Monitor.
• Respond.
• Amplify.
• Lead.
Objectives and Strategies in the Consumer Decision Journey
Source: Eriksson (2015)
A SEE-THINK-DO-CARE framework for marketing
communications in the digitally-empowered world
SEE-THINK-DO-CARE Framework
Customer Journey SEE THINK DO CARE
Accor goal Create awareness
Build trust and
convert random
visitors into fans
Create awareness
and rationally appeal
to consumers
Convert them to
purchase
Appeal on
emotional
basis
Bridge a
product or
service to a
target
audience
Types of content Content to
entertain
Content to educate Content to
convert
Content to
persuade
How to leverage
content
Targeted online
advertising to make
sure it appears to
people interested in
visiting the area.
Influential
marketing through
successful
bloggers/celebrities
(e.g., a blogger +
chef video)
Hotels should take
into consideration not
just their own
website, but their
entire online presence
and reputation.
Allow to book
the hotel quickly
and easily.
Provide specific
instructions
about staying
and traveling in
a certain region
Monitor and
respond to
reviews.
Highlight a
former guest’s
conversation
in websites to
portray a
positive view
for all future
travelers
SEE-THINK-DO-CARE Framework
INSPIRED BY MOM’S HUG
Challenge
o During pregnancy, there are many important purchase decisions, but the
diaper brand a mom chooses for her baby was not one of them. Most moms
deferred to the diaper used by their birthing hospitals, and Pampers had
100% of hospital contracts. Huggies was challenged to change mom’s
behavior by getting her to embrace and choose Huggies, even before
she went to the hospital. To accomplish this, we knew we had to give her a
strong emotional reason to choose us.
o Business Objectives
▪ Grow Huggies Newborn $ volume by +10%
▪ Increase Huggies Newborn market share by 2 share points.
o Marketing Objectives
▪ Build equity in brand perception that Huggies is better for newborns
than other brands, achieved by +5 point agreement that, "Huggies is
better for newborns than other brands."
Big Idea: NO BABY UNHUGGED
SEE PHASE:
Build awareness and interest for HUGGIES
1. Objectives & KPIs
Objectives:
• Awareness of the new campaign
• Top-of-mind
KPIs:
• % Aided Awareness
• Spontaneous Awareness (TOM)
• % Video Completion Rate
• # or % of interactions comments, shares,
likes
2. Tactics
• Online Video
• TVC
• Documentary-style videos
SEE PHASE:
Build awareness and interest for HUGGIES
3. Insight
o Now we know that mom was right all along.
For a newborn baby, being held isn't just
something that feels good – it's a powerful
developmental stimulus. Skin-to-skin contact
regulates body temperature, strengthens the
immune system and promotes weight gain –
all in addition to building emotional
security.
o Huggies diapers had originally been
conceived as an extension of a mother's
embrace – a concept that was built into the
name. By aligning Huggies with the emerging
science of hugs, we could build a more
emotional, human kind of authority,
connecting mothers to our brand and getting
them to choose us.
SEE PHASE:
Build awareness and interest for HUGGIES
4. Creative Execution
o We launched the emotionally-charged
"Power of Hugs" video online on
Mother's Day, followed by three
additional documentary-style videos
showcasing our hospital Hugging
Programs. We had media partnerships
with HGTV, W Network, Global, and
CTV, since there is a significant increase
in TV consumption throughout
pregnancy.
https://www.youtube.com
/watch?v=ciIygNeN-lQ
Source: WARC 2017
THINK PHASE:
Drive brand consideration
1. Objectives & KPIs
Objectives:
• Association and interest

in HUGGIES during

pregnancy time
• Interest/consideration about 
the campaign
and products
KPIs:
• Click / Click-through rate
• Cost per click
• Conversion rate
• Impression / CPM
2. Tactics
• Targeted Ads
THINK PHASE:
Drive brand consideration
3. Creative Execution
o Targeted digital placements
(both desktop and mobile).
BabyCenter, one of the top online
destinations for baby resources,
provided the opportunity for precise
targeting tactics, allowing Huggies to
continually connect with new moms
throughout the key baby prep
milestones.
THINK PHASE:
Drive brand consideration
3. Creative Execution
o No Baby Unhugged website,
which housed a White Paper, and
all our videos. This creative
chronicled moms' experiences
with baby hugging program, what
it meant to know that their infant
was being cared for, testimonies
from healthcare providers about
the power of hugging, and the
set-up of our first No Baby
Unhugged hospital.
https://www.nobabyunhugged.huggies.com/
DO PHASE:
Convince customers to take a desired actions (Sign-ups)
1. Objectives & KPIs
Objectives:
• Member registration / sign-ups
• Purchase
KPIs:
• Conversion rate
• Drop-out Rate (i.e. those who add to
cart/check-out but did not check-out/purchase)
• ROI
• Orders/Sales in dollars and volume
• Sign-up rate / Number of member registration
2. Tactics
• Sign-up to take part in the initiative
DO PHASE:
Convince customers to take a desired action (Sign-up)
3. Creative Execution
o The website invited women to join
the No Baby Unhugged mission by
uploading a photo of themselves
hugging their pregnant bellies. In
return, we made a $5 donation to
the hospital hugging program and
sent new moms a free pack of
Huggies Newborn diapers. All of the
many thousands of new moms who
participated were automatically
registered to our database.
CARE PHASE:
Engage with customers, nurture relationships with them
1. Objectives & KPIs
Objectives:
• Advocacy
• Word-of-Mouth
• Online Discussion
KPIs:
• Repeat website visitors
• # or % of interactions: comments,
shares, likes
• SOV / Sentiment Score
• ROI
• Number of Hashtag
2. Tactics
• Engaging posts on social media,
user-generated activities
CARE PHASE:
Engage with customers, nurture relationships with them
3. Creative Execution
o Social posts, which shared the
power of hugs and asked moms to
support our initiative, were
featured on our Facebook and
YouTube channels as we knew that
mom leveraged these channels to
stay connected and keep friends
and family engaged with all that
was happening with her life at this
very important time.
SEE PHASE:
Build awareness and interest for HUGGIES
THINK PHASE:
Drive brand consideration
DO PHASE:
Convince customers to take a desired action
CARE PHASE:
Engage with customers, nurture relationships with them
Online Videos
Display Ads Website
TVC
Member Registration
Social Media Engagement
NO BABY UNHUGGED
Establishing the Budget
• Two-way interaction.
• Often viewed as an expense rather than investment.
• Cut budgets in recessions.
3 Approaches to Setting the Budget
1. Establish budget using economic theory and marginal
analysis (or contribution margin).
• Contribution margin: Difference between total revenue generated
by a brand and its total variable costs.
Establishing and Allocating
the Promotional Budget
Marginal Analysis Approach
• Marginal analysis: Increase in
advertising/promotional
expenditures increases sales
and gross margins to a point,
after which they level off.
Weaknesses—Assumes that
sales are:
• A direct measure of
advertising and
promotions efforts.
• Determined solely
by advertising and
promotion.
Establishing and Allocating the Promotional Budget
Budgeting Approaches continued
2. Top-down approaches: Budget set at top and passed down to various
departments.
• Percentage-of-sales method:
• Advertising and promotions budget based on sales of product.
• Competitive parity method:
• Budget amounts established by matching competition’s percentage-of-sales expenditures.
• ROI budgeting method:
• Advertising and promotions are considered investments and expected to earn a certain return.
• Affordable method:
• Firm determines amount to be spent in various areas.
• Arbitrary allocation:
• Budget determined by management on basis of what is felt to be necessary.
Establishing and Allocating the Promotional Budget
Budgeting Approaches continued
3. Build-up approaches: Budget for what is deemed necessary to attain
communications objectives.
• Objective and task method:
• Isolate objectives.
• Determine tasks required.
• Estimate required expenditures.
• Advantage: Budget driven by objectives to be attained.
• Disadvantage: Difficult to determine which tasks will be required and
costs associated with each.
The Objective and Task Method (Build Up Approach)
Establishing and Allocating the Promotional Budget
How Advertising
and Promotions
Budgets Are Set
The Nature of the Decision Process
• Managers develop overall marketing objectives for the brand.
• Financial projections are made on the basis of the objectives and forecasts.
• Advertising and promotions budgets are set on the basis of quantitative
models and managerial judgment.
• The budget is presented to senior management, which approves and
adjusts the budgets.
• The plan is implemented (changes are often made during implementation).
• The plan is evaluated by comparing the achieved results with objectives.
Factors Affecting Budget Allocations
• The extent to which risk taking is encouraged and/or tolerated.
• Sophistication regarding the use of marketing information.
• Managerial judgment.
• Use of quantitative tools.
• Brand differentiation strategies.
• Brand equity.
• The strength of the creative message.
• Retailer power.
• Short- versus long-term focus.
• Top-down influences.
• Political sales force influences.
• Historical inertia.
• Ad hoc changes.
Establishing and Allocating the Promotional Budget
Factors to consider when Allocating the Budget
• Allocating to IMC elements (% to each tool).
• Client–agency policies.
• Market size.
• Market potential.
• Market share goals.
• Economies of scale.
• Organizational characteristics.
• Organizational structure.
• Power and politics.
• Use of expert opinions.
• Characteristics of decision maker.
• Approval and negotiation channels.
• Pressure on senior managers to arrive at optimal budget.