Media Matters: Create an Effective and Affordable Advertising Budget
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With smart budgeting and a forward-thinking mindset, a business of any size can create advertising campaigns that will drive sales.
Media advertising is an important component of any well-rounded marketing plan. For a business with limited resources, the concept of purchasing advertising may feel out of reach.
However, by deciding on a media budget that fits your business and a strategy for how to allocate those funds, the results can be a sizable boost in revenue that will more than cover the costs.
Plan how much to spend for the entire year
C. Lee Smith, president and CEO of SalesFuel, the parent company of the local media and digital marketing consultancy AdMall, says the first step in setting an effective media budget is to define what your business can spend for the entire year. According to SalesFuel’s 2014 Small Business Forecast, 33 percent of business owners bought advertising when a good opportunity came along. Smith says this approach can be dangerous, because purchasing advertising without a consistent strategy won’t yield sustainable results.
Instead, a hard-and-fast rule is to create an effective and affordable budget based on between five and eight percent of your sales revenue. Smith says, of his clients, that type of industry plays a role in determining the percentage they allocate. He cited dentists’ average spend is at five percent of their annual sales revenue, while sporting goods stores spend less than two percent. Across the country, the average media budget for a small business is about $500-1,000 per month.
Choose the right advertising mix
Your budget should cover digital marketing as well as traditional advertising, such as TV ads, print and billboards or locations ads. According to Smith, striking a balance between a variety of these platforms is critical to marketing success.
“The days of mass media are gone,” says Smith. “You can’t just advertise in one place and reach the majority of the market,” Smith says. “That being said, you have to account for frequency and impact.”
If you sprinkle your dollars around too many media platforms, you may reach more people, but you’ll reach them only one time. Considering it takes at least seven touches to get a customer interested in making a purchase, you want to focus your advertising efforts to reach the largest percentage of your particular target audience frequently. “It’s better to reach the people who count, rather than count the people you reach,” says Smith.
Studies done by BIA Kelsey found small businesses are spending about a quarter of the total media budget on digital advertising.
“A lot of people are going nuts on the digital side and forgoing traditional advertising, and that’s not a good idea,” Smith says. “It’s true that you have to have your digital house in order first and foremost, because today, customers are going to go there first. They are going to go to your website, search engines and Yelp to find your phone number or your hours and location. Have your name out there in print, in sponsorship, radio or on television to remind people who you are, what you do and what the benefits of your product and service are. That is what will drive people to social media and local search sites.”
In fact 7 out of 10 people find out about new products through TV. [Video Advertising Bureau: “Fast Lane to Attracting Likely Buyers”, 2014. Based on Auto industry analysis]
Radio reaches consumers with audio. Print reaches them with images. Only TV has the sight, sound and motion elements that make the medium the most effective for evoking emotion – a proven sales strategy. Local television advertising can be highly targeted to your community. These forms of traditional advertising improve your business’ name recognition and can keep you top of mind for your customer’s next online search. Customers spend an average of 5 hours a day watching television – in fact, it is the medium they spend the most time on. [TWC Media, Video Advertising Bureau (VA) & 2014 U.S. Census, monthly viewing hours reported are per person]
Digital video and display ads can be hypertargeted to reach specific customer based on their browsing habits, demographic, IP address, job title and more.
Consider an Omni-screen approach
Considering an average adult in the U.S. spends about two hours and 54 minutes each day on their mobile phone while spending two hours and 12 minutes on their computer, mobile advertising is becoming an increasingly effective marketing strategy and should be part of your mix.
By taking an omni-screen approach — advertising on television, online and mobile screens — you could boost your brand awareness by up to 40 percent. A March 2016 study has shown that cross-media campaigns were on average 57% more effective than those that aren't. [ARF study “How Advertising Works”, 2016]
By carefully considering your budget and business objectives, you can be confident that whatever the size of your business, you can develop an advertising campaign that can result in a boost in revenue that outweighs the costs.
So, how can you create an ad without breaking the bank? By Partnering with TWC Media. That’s How. Learn more.
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