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Advertising Allowance
Definition
Funds provided by a manufacturer to a retailer to support advertising or promotional activity for a product or brand. Advertising allowances are typically used to offset retailer marketing costs and increase product visibility rather than directly reduce shelf price.
How It's Calculated
Example
A household goods brand provides an advertising allowance to a grocery chain to fund inclusion in a weekly circular and digital ad placements, increasing awareness without changing the product’s shelf price.
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