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Advertising 101

Advertising is a complex topic. This is evident by the huge number of companies in business merely to provide advertising services provided to those organizations unable to successfully navigate the maze of messages, markets, and mediums on their own.  The advertising industry itself is a multi-billion  dollar operation in the United States, and contains many media-specific areas of expertise. Already sounds complicated and expensive, eh?

 In its most basic context, to advertise means to promote, or make something generally and publicly known. Sounds simple, but a business owner needs to know what message should be promoted, and what part of “public” is the right market for their trade. Most business owners I know (including the partners at Ivy League Images, Inc.) are focused on the result of advertising. There must be a pay-off for the investment, and we all want solid, empirical evidence. Unfortunately, there is no silver bullet—it’s a process that takes some time, must be very closely evaluated, and could change tomorrow! Poorly planned or a complete lack of advertising is a huge reason that many businesses fail. 

Choose a Message

The message is what provides information to the marketplace, sets you apart from your competition, and tries to influence potential customers. The message should be indicative of a business’ entire operation, but can also be product-specific, too. Determining what aspect of your business sets you apart from your competition is a good starting point for your message. If you are consistently less expensive, price could be key to your message. If you have a high standard for quality, lead with it. In order to know what separates you, it is important to know what your competition is doing. 

Messages can be a call to action, like the Nike message “Just Do It.” Of course, I’ve always wondered if that translates to “doing” the what’s depicted in the ad, or plunking down my $120.00 for the tennis shoes. 

Know Your Market

If your only avenue of sales is a single, brick and mortar shop, and there is significant competition without a lot of differentiation in your geographical area, you may have a very limited market. If you offer something very unique, or niche, the whole world may be your market. It can be a mistake to assume geographical limits when none exist.

A simple way to know your market is to survey your current customers. Surveying can be as easy as having a guest book near your register. You might ask for an address (so you’ll understand your geographic reach) and how they heard about your business.

Your local Chamber of Commerce can provide demographic information on the residents of your area, and the U.S. Census Bureau has general, overall statistical data. If you have a niche market, such as selling hunting gear, local agencies can provide data on number and types of permits. After you’ve exhausted the free/cheap methods of gaining market information, there are also fee-based reports available for just about everything!

Diversify Advertising Mediums

Some of the most common forums for advertising are print (newspapers and magazines), radio, TV, billboards, and the Internet. Once you’ve determined your general market, chose those forums that, at a minimum, cover your market. Your business may benefit by advertising through venues that slightly exceed your current market. This can actually expand your market, just by promoting to new geographic areas.

Many small businesses make the mistake of only advertising in their local paper. This indicates two grave assumptions: your market is based geographically; everyone in the area reads that newspaper.

The best approach is to create a combination of mediums. It is better to have smaller ads in a greater number of print mediums, than one large ad in only one medium, and better still to include radio spots, rather than just print.


One of the foundation concepts in advertising is frequency. Typically in print advertising, a potential customer must see your ad three times before they consider your business a legitimate source. The advertising marketplace is competitive enough to find reasonable pricing, but know what is reasonable; you must research them as a whole. 

How Much Should I Spend?

So now that you have chosen an advertising message, knowing your market,and diversifying advertising mediums. These concepts are the what, who, and where of advertising, but I know that one of the burning questions is, “How much should we spend on advertising?” For those regular readers out there, you’ll recognize the standard response—”It depends.”

Advertising can be the best investment for or the biggest drain on your business. Don’t confuse our advertising budget with your marketing budget. Be sure to set aside funding for public elations (PR) efforts, collateral (brochures, business cards, etc.), and events. Statistically, ell-orchestrated PR is seven times more effective than advertising. And well-orchestrated PR is certainly not free, but that’s a different article!

The one global truth in advertising spending is that if you don’t create a budget and closely track your results, you’ll never know that mysterious "just right amount". The balance is finding the point between what you can afford (even if it hurts a little sometimes) and what is effective.The key to fi nding this point is sales. Hopefully, each year, your business constructs written financial goals, including what you expect to generate in revenue and what you will have to spend to generate that revenue. It is important to be realistic about these goals.

One of the best ways to be realistic about projected revenues and expenses is to review your organization’s historical data. If revenue typically grows by 6% each year, it is reasonable to expect them to grow by 6% next year. It is not reasonable to expect them to grow by 15%,unless you have a specific plan for accomplishing that goal, such as increasing your market reach, product line, or other concrete actions.

Where Should I Advertise?

You should now take a closer look at the available advertising mediums. Some of your favorites may be knocked out of the game merely because of cost. If you’re a small business, it is unlikely that a TV spot during the Super Bowl will be in your near future. Local networks, however, may be a viable option, especially with the number of cable channels in existence.Get quotes from all viable mediums that have the ability to meet your target market. It will help you establish a norm for comparing costs.When you are receiving quotes, be sure to get pricing for all sizes and frequencies. Most single instance print and aired advertising comes at a premium in order to incent the advertiser to sign long-term agreements.

Be sure to ask potential advertising mediums about their reach and results. Some have been around long enough to have great data on what your results could be. No one can truly promise specific results, but you certainly have a better shot when you can match a medium to your optimum market.Once you have determined your revenue goal and have answered the basic what, who, and there questions listed above, you have most of what you need to construct an advertising budget. As a rule of thumb, small to mid-sized companies allocate from 3-5% of their revenue to their advertising budget. Larger companies tend to allocate a greater percentage (some up to 20%), especially where there is tremendous competition. To get to that just right amount will take several years of the budget/execute/analyze process.

If you are a new business, with no history upon which to draw, check into industry statistics through your local Chamber of Commerce, Small Business Administration, or other business related networking groups that exist. Advertising is critical to new businesses, even if you seem to be starting with a healthy word of mouth pipeline. 

When Should I Advertise?

When you spend advertising dollars is just as important as how much. After you have developed a basic dollar figure, and have a better understanding of advertising costs, review the timing of sales trends from the past. Compare that to advertising expenditures you made during that same period, in order to determine the results of past advertising. If past advertising efforts have been based upon a rocket science approach like who had the most attractive salesperson, throw that history out the window and start fresh. There can be a slight lag between real sales results and advertising effort, which is worth keeping in mind while creating an advertising calendar. Consider that previous time frames of low sales figures might be the best time to advertise in the coming year.

Now you should be equipped with how much you have to spend, what the advertising will really cost, and an idea of your optimum advertising periods. Some simple math should help you determine your monthly expenditures for advertising. If you come up short, it is best to remove a source of advertising, rather than forego advertising for a few months. As mentioned last month, frequency is one of the basic keys to advertising. It is better to run 3 months of 30-second radio spots than 1 month of 60-second spots; or 4 quarter-page ads over four months, than 1 full-page ad for a single instance. Don’t plan to run out of budget before you run out of time.

If you know that your business will move to a new location, launch a new product, or any other major changes, be sure to pad that time frame with more advertising dollars.If your business handles physical products, or is part of a franchise, consider sharing the burden of your advertising. Many manufacturers offer co-op, or a financial subsidy, when you present their logos or products in your advertisements. If your franchisor doesn’t offer co-op, consider grouping together with other franchise holders in your area to share the burden of advertising in mediums that reach your markets. 

Since you never know what kind of excellent opportunities might crop up from time to time,it is a good idea to put aside up to 5% of your advertising budget for discretionary funds. This fund would allow you to make unplanned purchases within reason. Be very stingy with these funds, as you can always spend them, but never get them back!

Now you get to do the fun part—execute your advertising plan. You’ll fi nd that the plan you’ve created will help take a lot of the headache out of advertising.

This article used with permission from 400 Edition, Inc. It is unlawful to use this article or any portion of it without the expressed permission of its author. This email address is being protected from spambots. You need JavaScript enabled to view it.

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