Posted in Marketing and Strategy Terms, Total Reads: 1397
Definition: Advertising Allowance
Advertising allowance is the allowance given by manufacturers to retailers to advertise their products. When manufacturers want to ensure that the retailers push their products properly and advertise it, they pay the retailers to do so as to ensure proper publicity and visibility for the product.
The manufacturers control the exact advertisement by the retailers by establishing conditions like granting of allowance only after the approval of the manufacturer and also ensuring that there is proof that the retailers did advertise. This allowance gives the retailers an incentive to advertise the product. Advertising allowance is a type of promotional allowance. The other type of allowance is display allowance where the company pays the retailer for the displays set up for a particular product.
Example: consider a store coming up with a brochure featuring the major product available in the store. If the store features a particular brand of product, then the manufacturer pays for the cost involved in advertising their product through the brochure.