is one of the most misunderstood, misapplied, and mismanaged cost
centres of Small and Medium Business. This month we look at 6
ways to make your advertising dollar achieve more - much more
- for your bottom line performance. We consider
micro-marketing (Point 6) as a serious alternative to main media.
How Much Should I Spend?
Naturally, the answer is "It depends!" Look at the table
you are: ||Consider
business, in a
duopoly situation or the major supplier, having mostly trade sales, and
strong trade word of mouth || ||0.75%
sales value |
many competitors, just maintaining the "status quo"
sales value |
business trying to get significant growth
sales value |
strong new brand or product
sales value |
Take this suggested spend seriously! Underspending will
you are trying to do, and waste any money you are spending.
For instance, don't even try Level 1 in the table (
0.75%) unless your sales are $100M or more - there just won't be enough
smaller businesses, with sales around $2M to $5M, the
spending (Level 2) needs 1.5% of sales value - that could be an ad
$75,000. Even that level of spending is scarcely enough to keep the pot
Building strong growth will need as much as 5% of sales
(Level 3 in the
table). For some, that sounds ridiculous - it could be as much as
$250,000! If you feel that way, spend less. You might
grow, but growth will not be driven by advertising.
When you are new to market, or you are trying to get a
established (Level 4), you will need to spend a whole lot more. Almost
everybody underestimates the task (and cost) of getting attention, of
creating awareness, and recruiting new customers. For a more
detailed discussion, click here to see our case study
on this very topic. The solution is provided. See
if you reach the same conclusions!
Talking too much money? Consider
this. At $5M sales, you should be operating at
$500,000 net profit. If you're not making that much money already,
you'd better find out what's wrong before trying to get any bigger. Or
the problems will just get bigger.
Plan Yearly, Buy Annually!
If you don't do an annual buy of
advertising media, you are
simply wasting money you don't need to spend. Expect 30% to
50% savings with an annual buy. Of course, to make a good
annual buy, you need an annual advertising plan. You can do
your ad buy without an annual plan, no problem. It just won't
make the most of your money
effective planning is the key to advertising effectiveness!
Don't Expect Your Advertising to Do Too Much!
Most people don't notice or care about your advertising. So
it takes a
long time for prospective customers to
see your ad in sufficient numbers, and act on it.
That means you'll need at least three months for each ad campaign.
Notice the "Double or Nothing" ad on the left of this page? Have you
read it? It's been running for three months with this issue.
You are asking your ad to do too much if you want a response in less
time. (Direct response radio and TV advertising is a lot
different, and too much to consider here.) Some people worry about
extending the life of their ads. Most people
just chop and change too frequently.
Run just four campaigns a year.
With one "corporate ad", that makes five for the year.
Any more is too many.
Make Each Ad Part of a Merchandising Campaign!
It's very easy to advertise products or services.
We understand them very well, and know why you should buy
them. Problem is "advertising clutter". You need to
cut through, and touting the virtues of products just doesn't do it.
That's why you need a very attractive offer. Any offer over
months or more is a "campaign". Then advertise the offer, and
plan the advertising strategically. Just like a military
The offer gets the attention you need,
triggers the desire to
try the offer, and gives you the chance to sell the product.
The rest is
up to you!
Don't Dilute Your Campaign!
It's very common for radio and TV stations to offer
filler spots to bulk up their offer. These are usually sold as spots
for "unscheduled brand building". Don't do it!! When you're running a
campaign - keep it focussed! Every ad you run must be the
campaign ad when the campaign is on.
There is time enough for
building" in between your
Make "MicroMarketing" a Feature of Your Planning!
After all these considerations about
main media advertising, it's worth
thinking seriously about micromarketing. Often just consigned
to the sidelines as "let's do a mail-out on that" knee jerk re-action,
micromarketing can be a very potent force when applied properly.
For lots of capital city small businesses, it's the only
affordable medium you can use. In most cases, your own
database has enough hidden potential new business to make it
your most effective source of new profit.
MicroMarketing is more difficult than
arranging a "free make
TV" ad, but it's potentially much more profitable.
If you'd like
to find out more about MicroMarketing and Advertising Planning, talk
to us, or submit a question here! Remember, there's
charge or obligation, and you get a whole
hour's consultation free.
Miss out on your own
copies of the Customer Charter last month? Don't worry! Click
Here to see it, and Click
Here to email your order. Remember it's free. There is still