Ahhh, the age-old question, and when the answer is being provided by an ad agency, you might feel a bit suspect. Wary or not, however, there are guidelines to advertising expenditures; the numbers are tangible and the concepts behind them more black and white than you might realize.
While there are, of course, many variables—including industry, business size, growth rate desired, etc.—both the Counselors to America’s Small Business (SCORE) and the U.S. Small Business Administration (SBA) define an adequate small-business advertising and marketing budget to be between 2% and 10% of sales.
Sound like a lot? It is. And frankly, most companies under-spend, believing that not to spend is to save. Unfortunately, this strategy can backfire. You’ve heard the old adage “you have to spend money to make money” right? Well, when it comes to your advertising and marketing efforts, the money you spend does directly affect your revenue. It’s a tough concept to swallow, but during lean periods like the recent economic downtown is not the time to cut back.
Too often businesses estimate their annual sales, subtract overhead and inventory, etc.
and then allocate anything left over to pay for advertising. When you consider that you must advertise to generate those sales to begin with, you can begin to see why this strategy may not be such a good plan after all. A better strategy is to consider your advertising or marketing a fixed budget item on the front end of your accounting, not a number that waxes and wanes depending on how business is going.
The key is to spend your money wisely and carefully tailor your campaign to fit your market and fulfill your goals, and that’s where your ad agency comes in. We can’t determine your budget. But we can, based on your budget, your market and your goals, determine the best way to allocate your marketing dollars to keep those sales high to pay for all that great advertising!
Showing posts with label radio marketing. Show all posts
Showing posts with label radio marketing. Show all posts
Wednesday, May 18, 2011
Monday, May 24, 2010
Once upon a time in the land of radio
Some 15 years ago RWA started working with a small retailer. With just one location, the company had no plans to expand. Rather the owner was quite content to simply grow the business that was currently coming into his shop, servicing as many customers as possible in his 9 to 5 (or sometimes 9 to 3) workday.
The company wasn’t the typical agency client, but we were impressed by the owner’s commitment to a consistent advertising effort so we took him on. Year after year, month after month, during season and during off season, we ran advertising for this one store. You know what? That old adage – the one about how consistent advertising works – well, it actually works!
For the past 15 years, we have consistently run advertisements for our retailer on local radio stations. Today, not a week goes by when a new customer doesn’t wander into this one shop and speak those glorious words “I heard your ad on the radio.”
Much ado has been made over radio and about the impact of new developments such as satellite radio on the effectiveness of local radio advertising. Granted radio listeners today have more options, much as they do in television, in print and online. So making an impact on radio is more challenging than it has been in the past.
The success our one-shop retailer has had on radio is largely due to the entertaining nature of its radio spots. Since the company has only one location which is manned only by the owner, the radio advertisements capitalize on the unique experience of shopping local and dealing directly with the guy who owns the shop. The offbeat, obviously locally produced radio ads feature the owner chatting with listeners, much in the way he does when they come into his shop. His topics cover everything from recent events, to childhood memories, to rants about life’s little annoyances. In between, he throws in a little info about his shop and invites people to come visit. Listeners come in as much to meet him as to shop at the store.
Radio has often been described as “theatre of the mind,” the one medium where an advertiser could build an image in its customers’ minds by telling them a really good story. Tell it enough and people start to listen. Then, pretty soon, they start to respond. After all, who doesn’t love a really good story?
The company wasn’t the typical agency client, but we were impressed by the owner’s commitment to a consistent advertising effort so we took him on. Year after year, month after month, during season and during off season, we ran advertising for this one store. You know what? That old adage – the one about how consistent advertising works – well, it actually works!
For the past 15 years, we have consistently run advertisements for our retailer on local radio stations. Today, not a week goes by when a new customer doesn’t wander into this one shop and speak those glorious words “I heard your ad on the radio.”
Much ado has been made over radio and about the impact of new developments such as satellite radio on the effectiveness of local radio advertising. Granted radio listeners today have more options, much as they do in television, in print and online. So making an impact on radio is more challenging than it has been in the past.
The success our one-shop retailer has had on radio is largely due to the entertaining nature of its radio spots. Since the company has only one location which is manned only by the owner, the radio advertisements capitalize on the unique experience of shopping local and dealing directly with the guy who owns the shop. The offbeat, obviously locally produced radio ads feature the owner chatting with listeners, much in the way he does when they come into his shop. His topics cover everything from recent events, to childhood memories, to rants about life’s little annoyances. In between, he throws in a little info about his shop and invites people to come visit. Listeners come in as much to meet him as to shop at the store.
Radio has often been described as “theatre of the mind,” the one medium where an advertiser could build an image in its customers’ minds by telling them a really good story. Tell it enough and people start to listen. Then, pretty soon, they start to respond. After all, who doesn’t love a really good story?
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