What Is a Media Budget?

Companies' expenditures on print, broadcast and other forms of advertising rely on the funds in their media budgets. Media buyers specialize in wringing the best array of exposures for brands and products out of their clients' media allocations. Buyers' efforts drive down the cost of each TV or radio spot, newspaper or magazine ad, billboard, transit ad or any other pay-to-play placement, maximizing advertising impressions and effectiveness. New media options take their places in the 21st-century media budget, expanding brands online.

Media budgets fall within overall allocations dedicated to companies' marketing efforts. To determine media-buying commitments, businesses can start with an arbitrary allocation assigned at some senior level of management without any supporting rationale, an all-too-common strategy given its lack of connection to successful, supportable results. Some advertisers assign a specific per-item advertising value to each product model and scale up that price by the number of items they want to sell. Other companies set aside a specific percentage of their revenues for overall marketing activities and carve out part of that figure for media spending. Additional strategies rely on estimating competitors' media allocations and matching them, or, more sensibly, determining specific marketing objectives and budgeting for the media best suited to reaching them.

Print, broadcast, outdoor and transit media form the traditional quartet of advertising media. Print includes newspapers, magazines and other periodical publications, along with direct mail. Broadcast subsumes TV and radio, including produced ads as well as rip-and-read copy provided to broadcast outlets for live performance by on-air personalities or for use in creating station-produced ads that air only on that outlet. Outdoor spans billboards and other signage along roadways or affixed to buildings. Transit includes ads on buses and bus shelters, taxi signage, vehicle wraps and other placements associated with cars and trucks.

The newest segments of 21st-century media budgets include online advertising, search engine optimization, social media efforts and online video. From pay-per-click to pay-per-exposure methods, online advertising puts companies' messages in front of consumers on the basis of keyword relationships to participating websites and blogs. Search engine optimization attempts to increase the likelihood that companies' websites appear high in the results returned for online searches related to their product lines or service offerings. Social media advertising includes sponsored posts or accounts on venues such as Twitter or Facebook or the use of Tumblr and Pinterest to engage with customers and prospects. Online video ads can run in a YouTube channel as well as through strategic placements before popular video content.

Companies subject the ads they place to post-hoc analysis to determine effectiveness and guide future media budgeting. Some forms of advertising include built-in tracking methods. For example, infomercials and direct-response TV spots track leads through toll-free numbers that correlate with the channels and programming through which the ads appear. Direct mail includes reply cards or envelopes that become the measurable proof of campaign response, as does any print advertising message that includes a mail-back registration form or entry blank. To measure the effectiveness of broadcast media, companies can commission research or look at simpler measures, such as sales performance during a period in which the broadcast schedule dominated their advertising efforts.