How Much to Spend on Advertising?
By Kim Ellis
By Kim Ellis
Newsletter Archive
California Business Resource
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Save Your Money
Most small business owners would agree that advertising is a must have for growth. However, in tough economic times, like we are seeing now, advertising is often the first expense to be jettisoned. In my experience, many small business owners consider advertising as nice to have, but only if they can afford it. I believe that advertising is the one thing you cannot afford to be without.
Of course, there are mitigating factors to consider. Return on investment (ROI), name recognition/awareness, target market, product or service use, and geography are some of the considerations that need attention when planning your advertising strategy. Advertising vehicles vary in price and coverage. There may be some audience overlap, which can be a good thing. The main idea is to identify where your potential clients are, and which vehicles will reach them. Then, calculate the cost of placement and how long you will be able to run your ad.
I normally encourage clients to create a list of the various advertising vehicles available and their associated costs. Next, analyze your target market to determine which advertising vehicles will best suit your needs. There are a variety of sources for this information and many are free. The U.S. Census Department, <http://www.census.gov/> is an excellent place to begin. It will take a little work on your part to build an effective advertising data table, but the benefits are well worth the effort.
Next, you’ll need to determine the “proper” amount to spend on the various advertising opportunities. Increasing the reach of your advertising helps accomplish two goals. First, it helps build name recognition, which is critical to growth. Second, it allows you to increase audience exposure. Ensure your advertising efforts are working for you. If 15 percent of your annual budget is spent on advertising, it needs to generate more than 15 percent of your revenue in order to be effective. Look at which advertising vehicles are getting results. One of the simplest ways to gather this information is to simply ask the client how they found you. I sometimes question the effectiveness of having a Web presence, but the majority of my calls are from people who found me on the Web. Naturally, I keep my Web presence current. Only you can determine the best advertising tools for your business. Don’t just spend money on advertising, invest in an effective advertising strategy and help your business grow.
Kim Ellis
General Manager, Grafic-Synergies.Com
45 Mattie Cove
Atoka, TN 38004
901-826-3116
kim@grafic-synergies.com
www.grafic-synergies.com
Of course, there are mitigating factors to consider. Return on investment (ROI), name recognition/awareness, target market, product or service use, and geography are some of the considerations that need attention when planning your advertising strategy. Advertising vehicles vary in price and coverage. There may be some audience overlap, which can be a good thing. The main idea is to identify where your potential clients are, and which vehicles will reach them. Then, calculate the cost of placement and how long you will be able to run your ad.
I normally encourage clients to create a list of the various advertising vehicles available and their associated costs. Next, analyze your target market to determine which advertising vehicles will best suit your needs. There are a variety of sources for this information and many are free. The U.S. Census Department, <http://www.census.gov/> is an excellent place to begin. It will take a little work on your part to build an effective advertising data table, but the benefits are well worth the effort.
Next, you’ll need to determine the “proper” amount to spend on the various advertising opportunities. Increasing the reach of your advertising helps accomplish two goals. First, it helps build name recognition, which is critical to growth. Second, it allows you to increase audience exposure. Ensure your advertising efforts are working for you. If 15 percent of your annual budget is spent on advertising, it needs to generate more than 15 percent of your revenue in order to be effective. Look at which advertising vehicles are getting results. One of the simplest ways to gather this information is to simply ask the client how they found you. I sometimes question the effectiveness of having a Web presence, but the majority of my calls are from people who found me on the Web. Naturally, I keep my Web presence current. Only you can determine the best advertising tools for your business. Don’t just spend money on advertising, invest in an effective advertising strategy and help your business grow.
Kim Ellis
General Manager, Grafic-Synergies.Com
45 Mattie Cove
Atoka, TN 38004
901-826-3116
kim@grafic-synergies.com
www.grafic-synergies.com