You’re a new business owner, ready to buy your first advertisement,
so you call the local newspapers, radio and TV stations along with several coupon
and website vendors to see what they have to offer. Unfortunately, you have never
purchased advertising before and you’re hoping the advertisers will help you figure
out exactly what to do. You may not realize that most advertising sales reps are
paid mainly on commission and their primary mission is to sell you advertising or
they don’t make any money. What happens next is all too often the scenario that
plays out. In this article we will follow this scenario and cover a simple 10 step
program that will insure you’re buying the right advertising and that your return
on investment has the best chance of making a profit. Now let’s get back to that
scenario.
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As an Agency of Record for many of our clients, it always brings
a smile to my face when the advertising rep. looks me in the eye and says, “My product
or service is not a good fit for your client”. Unfortunately, this is rarely the
case. Most of the time they pitch what they have to sell regardless of the fit.
It’s really up to the business owner (or their agent) who is buying the advertising
to know what they need and what they are looking for, otherwise they are just buying
advertising to see what works (and in most cases throwing most of their advertising
budget down the drain).
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It's important for a beginner to get their feet wet by attempting
simpler and shorter run marketing campaigns. After all, your choices are numerous
and the sheer number and types of marketing elements can be daunting in and of itself.
Simple advertisements can include, a print ad in the local newspaper or a magazine,
a short run pay per click campaign in Facebook, LinkedIn or Google Adwords, a bill
board ad, an ad short run on radio, a direct mail piece or even ad in a coupon magazine.
As a beginner, your budget will often determine which media you choose.
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Now let’s look at a 10 step process that will keep you focus,
pick the right kind of media, and help you track your results so that you will know
if your marketing is working.
- Step 1 – Create and Stick to a Budget. – One of the biggest mistakes new business owners and entrepreneurs make is not creating a realistic budget that they can stick to. Figure out what portion of your revenue you can afford to invest in marketing. Understand that you are gambling with this money in that there is no guarantee you will make money when you invest in your chosen marketing/advertising. Make sure you put aside some funds for researching your method, message and target audience. Don’t let sales people fool you into thinking that you will be able to buy more marketing than your budget will allow, based on the belief your sales will generate enough ROI to pay for the additional advertising. This is also a good time to create your SMART goals that determine your success.
- Step 2
– Identify Your Target Market. - You must have a strong idea of who your
target market is. Not everyone is in your target market. You can easily do research on the web today by just typing in relevant questions like: “what is the target audience for people buying cupcakes in Florida.” Or “What is the age and income of people in Northeast Florida that use chiropractic services.” You can also find a lot of useful statistics from the vendors you buy from, as well as advertisers, your accountant, the library and the ad agency you might be using. If you don’t take the time to fully identify your target market, you will never be successful unless you have the grace of God on your side. (Not to mention money to burn.)
- Step 3 - Choosing what to advertise. - Choosing the right product that has the right amount of profit, demand, availability, distribution and timing is a tall order to say the least. Whatever you choose to sell, it must produce a profit in a timely manner. Do you have to sell a lot of these widgets or services? Or can you sell one a month and pay for 3 months’ worth of advertising. Is it a big ticket top of the line product with few competitors, or is the product sold primarily on price? Is this product in high demand, is it easy to obtain and deliver? Do you have geographic exclusivity or is the product sold everywhere by anyone? And finally, does it produce recurring revenue where the initial sales produces income for many months to come? Most companies have more than one product or service. It’s usually cost prohibitive to advertise all of your products, so you have to pick and choose the products or services that will bring in the most sales with the least resistance.
- Step 4
– Choose an Advertising/Marketing medium that fits your budget. – If
you have properly finished steps 1 through 3, you may have already eliminated several marketing mediums already. For example, if you only have $300 a month in your budget – you probably won’t be running TV and Radio ads. These mediums usually have a starting budget of at least a $1000 a month. Also, if you have a larger budget (say $2,000/month) you will have to choose if you’re going to split the money across multiple medium (like $1000 in print and radio).
Courtesy of - Step 5 - Creating a compelling message. – Many marketers say you should have created your message before getting to this stage. I say they are wrong. Your message needs to be media specific. You have to have a good idea of what your main selling benefits are and what your unique selling proposition is in order to build your message. You also have to take into account your target audience, their language, imagery, age, sex, ethnicity and income. Ideally, your message should be short, focused, with an extremely clear call to action and a compelling offer. Make sure you create at least 3 versions of this message.
- Step 6 - Test and measure your message – In step 6 we will determine if you’re on the right track or if you have lost your way. Testing and measuring your three test messages from step 5 will show you where you should or shouldn’t be spending your money. If done properly, it will also verify your target audience or point you to your proper target audience. This testing process can be carried out using the A/B testing method. The term A/B testing refers to testing two different ads in the same medium to see which one provides the best results. This includes using the internet with pay per click ads on Facebook, Google Adwords or LinkedIn (aka PPC), with ads pointing to either landing pages in social media or on your website. A/B testing can also be run on the radio, in TV or in print. However, they will cost more to set up and run in those mediums. A realistic budget for testing a message in pay per click is between $100 and $500.
- Step 7
– Evaluate the Results – After 30 days of testing, (or when your test
budget runs out) you need to evaluate your results. This information should show which ad/s did the best, the demographics of the participants (age, sex, income, etc.…), the best time of the day, the best days of the week and so on. It should also support your idea that your product/service you chose for the advertising campaign was the right choice. If your results are less than stellar, you will need to re-evaluate your whole program and retest. Never spend money on a product that the test data does not support. Remember the purpose of most advertising is to sell your product or service at a profit when all is said and done.
Courtesy of - Step 8 - Implementing the best Message that Produces the Best Results. – If you're testing supports the theory that you can make a profit selling your product or service then it’s time to implement your advertising by signing an agreement for 3 months if possible. If at the end of three months your results are still good, continue the campaign and ask if you can get a better price for the advertising if you sign up for a year. It's important to note that in some cases you will have to sign up for a long term campaign in order to make it cost effective to run the ads. Make sure the ads are producing if you're going to sign up for a 6 months or longer. See if you can get some sort of guarantee with the program as well.
- Step 9 – Continue Measuring the Results. By this point you should be making money and learning more about the effectiveness of your marketing, your message and the medium in which you are marketing. Also check your results, at least on a quarterly basis (if not weekly and monthly). Things change, seasons change, competition changes, consumer needs and appetites change! Keep your finger on the pulse of your sales and marketing to make sure your money is well spent.
- Step 10
- Tweak your Message and Method. - After six months or so, re-evaluate
your progress and method. What can you do better? If the marketing is producing enough profit to increase the marketing budget, do so in a prudent way. Make sure you bank at least 10% of the profit.
Courtesy of - Do it again. – Now that you have developed a program that works, go back to step 8 and do it all over again. If you feel there is room for improvement, go back to step to 6 and tweak your program by following steps 6 through 10. Then do it all again until that marketing on longer makes money (at which point to go back to step 1).
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That’s my opinion. I look forward to hearing yours.
In this article I have provided a 10 step process to help new entrepreneurs
navigate the hazardous waters of a first time marketing campaign. It provides a
clear step by step method to help the new business owner achieve success and become
profitable with their often new and limited marketing budgets.
If you want
to save yourself the considerable time, money and aggravation of having to perform
all of the steps above, consider retaining a marketing agency. Not only do they have the time, contacts and experience
to perform the entire process, but it will cost you nothing to retain them since
their fees are paid by the advertiser.
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Great article with excellent information for anyone who has not bought advertising before. The testing and measuring is very important. Note: Sometimes when an ad rep asks what the budget is, the prospective customer plays it coy or hasn't even figured it out yet. Set a budget and tell the ad rep what it is. The budget amount will help the ad rep to limit the presentation to what the customer can afford. That's a time-saver.
ReplyDeleteClear steps on media buying. Tracking the results is imperative to make your advertising dollar go the farthest.
ReplyDeleteI liked the line about the sales rep saying their product or service is not a good fit. I have NEVER heard that one! All good info.
ReplyDeleteThis is priceless information! To many times I watch close friends blow tons of money on unnecessary marketing, or have no idea what the return is on their investment they just go with the flow and keep paying... Know what your doing, pay attention it really matters!
ReplyDelete