method, the advertiser allocates a fixed percentage (say 5% or 10%) of forecast sales value to the advertising budget. This method is predicated on the assumption that advertising causes future sales volume. The percentage of sales method is the easiest method to use and for this reason remains one of the most widely used methods for setting budgets. A major problem with the %-of-sales method is that there is no consensus about the percentage value to apply. Some companies use industry averages as a guide to set their marcomms budget. The following table, based on industry averages, shows that the % value can vary from around 20% of sales to less than 1 percent. Objective and task method The objective and task method is the most rational and defensible of all budgeting methods. In this method, the advertiser determines the advertising objectives and then defines specific, measurable communication tasks that will need to be undertaken to achieve the desired objectives. Cost estimates are developed for each communication task in order to arrive at a total budget estimate. This method is time-consuming and complex, and as a consequence has been less widely used in practice, however, recent research suggests that more marketers are taking up this approach. Competitive parity method The competitive parity method allocates the advertising or promotional budget based on competitive spending for comparable activities. This approach is a defensive strategy used to protect a brand market position. It assumes that rival firms have similar objectives and is widely used in highly competitive markets. The main criticism of this method is that it assumes competitors know what they are doing in relation to advertising expenditure. There are several approaches to using the competitive parity method: a) Allocate the same budget on advertising as a key rival; b) Allocate the budget based on the industry average expenditure levels; c) Allocate a similar percentage-of-sales as a key competitor; d) Allocate the same percentage-of-sales on advertising as the industry average; e) Use competitive activity as a benchmark to which sums are added or subtracted based on managerial judgement. Competitive parity requires a detailed understanding of competitor's expenditure in key areas. Market intelligence used to inform this approach can be obtained by consulting company annual reports and also from commercial research service providers such as Nielsen's AdEx. Other methods used to set advertising and promotional budgets include the market share method, unit sales