Dictionary of Marketing Terms: advertising allowance
advertising allowance
funds allocated by the provider of a service or the manufacturer of a product to be paid to a merchant for advertising that service or product. The advertising allowance may be in the form of a deduction from the wholesale price of a product to allow for the cost of advertising, or a reimbursement to the merchant for advertising costs already incurred. The Robinson-Patman Act (1936), which requires a seller to treat all competitive customers equally (proportionately) with respect to advertising allowances, has influenced the use of these allowances.
