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David Addison
by David Addison
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Advertising: Begin with a Plan and Stick to a Budget

03/26/2015
Advertising: Begin with a Plan and Stick to a Budget

I’m sharing some ideas on advertising and budgeting because I’ve been working with ‘wild west’ type advertising clients.  You know the type, the client who calls up and says “I’m not satisfied with sales growth this quarter [mind you that it is only one month into the new quarter] and I have a great idea that I want Dirigo to have up and running by the end of next week.”  I had a similar conversation with this very client last quarter and we got wrangled into executing some crazy ass crap that, well, was a heap of poop.  I reminded this client that several months ago we jumped onto a similar notion that ended horribly [note the polite language when speaking to a client].  “And what’s your point David?”  My point is that consistency and clear messaging pays off.

Chasing “fantastic ideas” fills the budget with promotional expenses that are not strategic and that rarely strike pay-dirt.  If you are one of these ‘wild west’ types stop for a moment and sum up the cost of all those ideas that produced unequivocally nothing of meaningful value for your business but cost you countless thousands of dollars.  How many more 'seeds', ‘bars of soap’ or ‘fish oil pills’ could have been sold if we had spent that money wisely?

Most clients are well organized and exercise control over advertising expenditures by establishing a firm budget for the coming 12 months. For those ‘wild west’ types, let’s spend a moment to review some basics:

  1. Begin with a budget and stick to your budget.  Start small and steadily grow your advertising year-over-year.  The average firm spends 12%+ of their gross markup on advertising.  If you are looking to grow market share you’re going to spend a lot more than that. Whatever your method for setting the budget (we have many), be sure to compare your ad budget to your industry and the competition.  Don’t get too get caught up in what your competitors are doing.  They’re rarely truly in the know.  Almost nobody becomes successful by following a competitor.  Be unique! Once into the year, don’t stray from your budget.  If things are a bit soft, stick to your guns.  If they’re ‘hot’ don’t be tempted to add more dough.  Remember, the tortoise typically wins the race.

  2. Spend consistently.  Plan your sales.  Work your plan.  The number one key to advertising success is consistency.  You must have a plan.  And you need to give your plan adequate time to work. Don’t expect instant gratification from your advertising efforts.  Consistency often takes a longer-term commitment.  Consumers only buy when they have a need or desire for a product or service.  Your advertising or brand awareness needs to be top of mind when the need arises. If you cannot afford to advertise 4 weeks a month, come up with a plan that complements the full month or the sales cycle. Avoid being out of the market for two successive weeks because that will kill ‘Share of Market´ and ‘Share of Mind’. By January 1st of each year you should have a plan in place for the entire year.  Don’t commit your ad dollars in a single chunk.  Buy monthly or quarterly.  This will allow you to fine tune and adjust where necessary. The advertising world is rapidly changing. QR Codes were hot.  Now they're not.  How many QR codes actually got clicked?  The point here is that you don't need to latch on to every fad.  Pick your advertising carefully and spend efficiently where you choose to spend.

  3. Spend efficiently. It is okay to squeeze the so-called nonworking or nonproductive marketing spend. For those not familiar with this filthy term of art [us ad types don’t like clients fixated on the nonworking portion], nonworking media spending is the budget spent on creating advertising and content. Working media is the money spent to air or flight the content.  Don’t squeeze yourself out of a plan or a strategy. The normal level for nonproductive media falls from 10% to 20% for those that advertise regularly.  If you're new to advertising you're going to spend more to formulate a plan and metrics.  Mind you, nonproductive marketing can be quite productive done correctly.

  4. The media with high so-called nonworking budget ratios actually have a tendency to work best. If the goal is to get people to participate in a brand and to evangelize, you're going to have to invest.  Branding, content development, active blogging, and higher-end social media efforts fall into this category.  The problem with nonworking is that it is typically not scalable.  Producing good content is expensive, but, it has the highest ROI of any media. Built too much of a content machine and you are likely to get penalized by Google.  The key is balance and knowing how much to allocate to which marketing segments.

  5. Keep some of your budget unallocated.  If your yearly budget is $100K then leave $15K unplanned until several weeks before the next month begins.  The closer you get to ‘press’ or ‘air’ time the better the deals get.  Don’t lock into ‘upfront’ TV spending.  The TV ad market in 2015 is extremely soft.  “Upfronts” or early buying is a bad idea for the 2015-2016 season. Every so often put the word out that you might have some extra money in your budget to spend if the deal is sweet.  Last minute smart buys with existing vendors can amplify your advertising reach.  Don’t stray far from your plan and buy what you know works.  There are few real deals to be had. If you don’t end up spending the surplus, that’s alright.  Bank the budget for a rainy day or let it fall to profit for the year.  The better buys are going to be found on digital platforms.

  6. Be sure to budget both ‘sell’ and ‘tell’. Broadcast, cable television & radio as well as YouTube pre-roll and content marketing (e.g. Taboola and Outbrain) are ‘sell´ media. These forms reach both active and passive shoppers and create reasons to shop now. Print and the Internet (including most forms of Pay-Per-Click) are ‘tell´ media. They offer information to prospects that are searching. Use ‘sell´ media (broadcast) to drive potential buyers to your ‘tell´ media. Technology means that we can easily targeted. That’s not déjà vu, it’s called retargeting.  Use the most advanced technology when you can. 

  7. Know why customers buy your products.  The reasons need to be compelling and emotional.  Folks don’t want a drill, they want a hole.  They don’t want an email marketing service, they want more sales or leads.  They don’t want a marketing agency, they want a brand that earns. Customers don’t buy products – they buy the benefits they derive from the product. Advertising is nothing more than salesmanship using media. Advertising is not about being beautiful. It is about the words that you use and the emotion that you elicit.  Advertising works best when it contains a consumer benefit. You need to be persuasive, emotionally compelling, striking, and benefit-driven. Be consistent in the use of style — consistent merely means that consumers should be able to recognize your brand from one advertisement to the next ad.

The ‘wild west’ days of mad men is a bygone age.  Forty years ago William Bernbach famously said “advertising is fundamentally persuasion and persuasion happens to be not a science, but an art.” Times have changed.  Advertising is truly a science today. These few rules have worked for others, and they’ll will work for you too.

Dirigo is a full-service marketing agency with a heavy footprint in digital media.  We'd very much like to be given an opportunity to earn your business.  My name is David Addison, one of the Partners at Dirigo.  Thanks for reading.

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