The Same Old, Same Old Spells Disaster: Squeeze the Most Out of Your Advertising Budget Effectively - The Online Magazine for the Sign Trade.
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The Same Old, Same Old Spells Disaster: Squeeze the Most Out of Your Advertising Budget Effectively

While monitoring this years budget and preparing for next years ad buy, make sure you're really looking at the results in an objective manner. Your budget is never big enough, so make sure you're following a well thought out plan and not just doing what you've always done.

By Sean Scott

Buying advertising is a difficult job. John Wannamaker once said, “Fifty percent of my advertising is wasted, but I don't know what half.” Current advertising statistics tells us that this was an optimistic statistic.

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  • Those involved in advertising experience the challenges of making the right choices on how to best market products and services. With tradeshows, print magazines, online, direct-mail, phonebook, newspaper, billboards, vehicle wraps, radio, and more, the choices are difficult with everyone's limited ad budgets. For many companies, decisions are commonly based on what you've done before. And because you're comfortable with it, you pretty much do the same thing year after year.

    "The path of least resistance is the path of the loser." --- H. G. Wells

    Just the Facts
    Fact: Over time all things change. Some more than others, but all things change. You have to reflect on whether your strategies, positioning, goals or products have changed and how those changes reflect current choices. Leaders constantly reevaluate whether the change has been for the better or worse. We can't rely just on our gut or opinions; we need to look at the facts. You can't keep wearing the same shoe if your feet change size, can you?

    "The path of least resistance and least trouble is a mental rut already made. It requires troublesome work to undertake the alternation of old beliefs." --- John Dewey

    While pondering all the different avenues available to spend our advertising dollars, there are many important factors that need to be considered:

    • What is the level of response received?
    • What is the cost per response?
    • What is the ROI?
    • Are there new opportunities?
    • Are you divested into more than one place or market?
    • Do you have an exposure across all advertising mediums?

    There are other considerations as well, but these are common to most companies. Each company's objectives, markets, demographics, uniqueness, and breadth of offerings will be factors in determining the options that need to be considered when looking at all the opportunities that are available.

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    Numbers Don't Lie
    One way to make a comparison between mediums is to look at the direct mail option. The cost for producing, addressing and mailing a standard size postcard that is 4"x6" to your own personal mailing list will cost you a minimum of 29 cents each. So to mail 5,000 pieces to your list, it will cost you $1450. Advertising statistics averages tell us that you should expect a 2 - 3% response rate on a direct mail campaign. So given those reasonable numbers, it will cost you $9.67 per response. Keep in mind that responses are not all going to be closed sales, but inquiries only until you convert the prospect to a customer. The percentage of those responses that convert to sales from this campaign should be tracked.

    With those conversion numbers and the sales figures associated with those conversions in place, you can determine what your return on investment is for that ad. "Now hold on," you say, "I don't have all of that information at the ready." Well, you're certainly not alone. Getting a sales force to bother with the source of any lead may be a factor that most companies don't give much thought to, because of the time and energy involved.

    Even if you've have an excellent sales force that is trying to get the source from your contacts, getting a customer to recall how they heard about you is another challenge in itself. The fact is that the prospect probably received numerous exposures to your company over the last few months (if you're doing your job right), and only remember the last place they saw you, hopefully. At that moment in time, is where you are forced to consider the value of branding into your marketing picture.

    A customer's ability to attach your company to a need they have from memory is established by branding. If they've been seeing the XYZ Company and its products in direct mail pieces, magazine ads, online ads and tradeshows, then they suddenly are searching their newspaper and low and behold, they're looking for that widget today and there you are. Who are they going to pick? A name they know or a company that they've never heard of. Subliminally, they will usually pick the company that they have heard of before.

    Diversified marketing
    You've heard the phrase, "Don't put all your eggs in one basket." Well that certainly applies to marketing and advertising. If you put all of your marketing dollars into one campaign or medium, you could be the next failed A diversified portfolio across the mediums that best reflects the demographics for your products is going to be your best strategy. If you're a nationwide company don't just advertise in your local newspaper, you'll never reach your objectives. Don't advertise in Signs of Russia if you only service the Western United States. Use common sense and look at all the options you have to produce a plan that fits your business at the present time.

    If your budget is the tail that wags the dog, then make sure it wags it in the best way possible. We all get caught up in meetings, politics, management that doesn't understand, and employees that don't follow management, and management that doesn't follow itself. So stop the bus for a moment and reflect where you are right now.

    We have a responsibility to ourselves as to how well we do our jobs, and that performance reflects on the company that we work for. Are we doing our best at our jobs? Isn't that what we're paid to do? Is there room for improvement? What actions can be taken? Have our egos and opinions surpassed all rational thought? Analyze where you are today. Where is your company at today? What are the goals? Is the company moving towards those goals? Have things changed? Have adjustments been made to reflect the changes? When on earth is this article going to end? If you've read this far, you may be starting to look back at your current planning strategy already, keep at it.

    There are many introspective questions that can be asked. Talk to a friend that isn't in your business. Sometimes a fresh perspective can shed a lot of light on things. I'm amazed where ideas hit me sometimes, so just jot them down wherever you are, so you can consider them at a later, more appropriate time. Seek out better advertising and marketing opportunities where you will get more bang for your buck.

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