The million dollar question that I hear all the time is “What is the most effective way of advertising?” My answer to this is, it depends… There is no such thing as a one solution to every business problem. Every industry and every business is unique, and targets a unique clientele. To put together a smart marketing strategy, you have to understand the buying process of your customers, what problem they are trying to solve, and why they would prefer your service or product over the competitor?
It all starts with a marketing budget. Traditionally the rule is to take 3% of your projected income and reinvest that into you marketing to get create growth for your business. You also have to understand the lifetime value of a customer. So if a lifetime customer is worth $10,000 and you have to invest $3000 to get them, you will have a positive of $7000 ROI (Return on Investment).
There are a lot of different advertising and marketing outlets that a business can use to position itself for success. In order to put together a successful strategy, you have to start with a plan. This starts with defining what you want your brand to be. A brand is not something tangible, its’ the perception customer have when thinking about your business, so the customer controls the brand. The business can create a direction for the brand, but eventually the consumer will control it. To get a good understanding of your brand positioning in the market you have to start with a SWOT analysis, which stands for Strengths, Weaknesses, Opportunities, and Threats. This will give a good understanding of where your business is in the marketplace and what the growth potentials are.
Once a brand direction has been set and a target audience has been defined (never say we sell to everyone, you need to have a focus) you can start working towards creating TOMA (top of mind awareness) and position your marketing messaging in the right stage of the consumers buyers journey. Consumer behavior is an important factor in your overall marketing plan. Many researches have been performed to measure the ideal marketing campaigns. When you try to build brand awareness, long term frequency buys is the key, where if you try to promote an event you will want to go with a short term larger impact buy.
So what type of advertising should you use? Any type of advertising works, but some are more efficient than others because they target your audience better or are able to represent your brand more effectively. So this all depends on your overall strategy. Here is my opinion on the most common advertising outlets and which strategy to use with it:
The newspaper industry has definitely changed. Where in the past it was the primary source of local and national news, the internet has taken over most of this, especially with the younger audience. However, newspapers advertising still play an important role. The advantage of newspaper advertising is that you target a demographic that is educated and has medium to high income. If done correctly, newspaper advertising can be perceived as more reputable because you are associated with content in local news, culture, and sports.
Radio advertising can reach a more diverse audience. There are channels for every lifestyle and regardless of what most experts projected, radio still performs very effectively to get across your brand message. The good part about radio is that, just like TV, it can create an emotional connection. So if your consumers buying process involves emotional appeal, than radio can be a strong outlet. Frequency is the key here. Many times Radio is used as background music, so consumers will have to hear the message multiple times before they take action.
TV advertising really falls into two segments, which is cable network or broadcast network. Where in cable you can reach very specific audiences by target certain programs that is designed for a niche audience, with broadcast network you will be able to reach a larger audience with their local news and programs. With TV advertising it is not the amount spots that counts, but more the amount of viewers that watch the spots. Of course, just like in Radio, you want to have frequency in order for the message to be effective. Video also has the opportunity to appeal to emotions and is more memorable than any other outlet.
With direct mail there are basically two different options: you can send out static mail or variable mail. With static mail you send out the same message to a list of mailing addresses. The average response rate for direct mail is around 1%. With variable direct mail, you can personalize each mailer with a message and/or artwork. When mailers are personalized the response rate will also go up. Some variable mailers can go as high as 6% response rate. Of course variable mail is more expensive but will also get a better response rate. Just like TV, don’t focus on the quantity, focus on the cost per conversion.
Billboard are a great tool to build brand awareness. When placed on a high traffic road, your brand will be exposed to many eyeballs. The goal with billboard advertising is to keep it very simple. People that are driving by do not have time to read an entire paragraph. Either focus on an immediate call to action or use it as a branding tool to create awareness so that the consumer will research for more information, once they are in front of a computer. Do not place a QR code on a billboard! A good rule for billboards is that you want to stand out, so creative design that catches their attention is key for this advertising outlet.
Online Banner Ads
As the internet has grown to become the primary source of most of content consumption the banner ads play a more important role in today’s ad buys. Online banner ads are direct response ads, if someone sees an offer they will take immediate action by clicking on the ad. Never send them to your home page. Create a landing page instead with the offer so that you can increase your conversion rate. With digital ad buys you can target audiences that are in the market for your services or products. Sites place tracking cookies on every computer and are able to learn what the visitors online behavior looks like. For example: you can place an ad for your local law firm and target those ads to visitors that have recently searched and visited law firm website in your market. Another technology that you can use with online banner ads are recall ads. With this you place a tracking cookie to anyone who visits your website and the consumer will continue to see your offers on banner ads of different sites. Amazon does this frequently when you search their catalog. There are also other technologies such as GEO fencing where you can use the location technology (GPS and cellphone towers) of a mobile phone to target your ads within a certain mile radius.
Search Optimization and Pay Per Click
Personally I don’t see SEO or SEM as advertising, but more as a sales process tool. Because when consumers are looking for products or services they have already passed the awareness and are looking for solutions. With search you have to do everything in your power to become the top 5 for your search terms. If you are on the second or third page, your website does not exist on the search engines. You have to see search engines as Google, Yahoo, and Bing as a lead generating tool. If 10,000 people are looking for plumber in your market, the top ranking site will get about 4000 leads, the second one will get about 2500 leads, and the third one will get about 1500 leads. With search optimization you want to get the highest ranking on the most popular search terms. However, depending on your budget and your competitors, you might want to find more niche terms so that you can compete where your competitors are not.
In my previous post “How to market yourself on Social Media” I talked a lot about how to market yourself and/or your business. Due to the staggering growth of social media, many networks have to filter out messages. So your 500 followers will not see every post you place, its more like 2-10%. With social media it is very important that you create posts that generate engagement. Because engagement such as likes and comments or re-tweets serve as multipliers towards your messaging. Also if your audience engages with your posts they will receive more of your updates.
Email Marketing has the highest ROI of any type of marketing investment. The cost of sending out messages through this platform is relatively cheap. You have to of course generate a large enough email list to make these programs work. Whatever you do, NEVER BUY AN EMAIL LIST!!! Email communication will only work if your consumers have willingly signed up to receive your messaging. One big advantage of email marketing is that you can track how many people open your emails, which links they click on the emails, and how many are never seen. With this you can do a lot of A-B testing to see what messaging has the best results.
This is another subject that I talked about in a previous post “The importance of online video Marketing”. Video has become on of the most effective marketing tools. Just like in broadcast and Cable, online video’s appeals to emotions. Do not use your 30 second TV commercial as your online video. TV commercials are made for TV, online videos are generally longer, more educational, and require and instant action from the viewer. As more and more people continue to stream programs and consume news and other content online, online video will continue to grow and will become one of the biggest ad spend for most businesses.
Of course your budget does not allow to invest in all media outlets. Many times it is better to pick one or two and dominate the outlets than it is to spread over multiple. You want to reach above the clutter. A good marketing plan with a solid strategy is the core of your ad spend. If you have a questions about the advertising outlets and how it applies to your marketing plan or if you need help creating a plan. Feel free to reach out to my on my LinkedIn page or contact me here.