How much should you spend on marketing?

The aim of advertising is not to state the facts about a product but to sell a solution or a dream. A Ferrari automobile delivers on three dreams: social recognition, freedom, and heroism.

Ads primarily create product awareness, sometimes product knowledge, less often product preference, and more rarely, product purchase. That’s why advertising cannot do the job alone. Sales promotion may be needed to trigger the purchase. A salesperson might be needed to elaborate on the benefits and close the sale.

Most ads are a waste of the company’s money and time. Most ad agencies blame the lack of creativity on the client. Clients wisely ask their agencies to come up with three ads, from mild to wild. But then the client typically settles for the mild and safe one. Thus, the client plays a role in killing good advertising.

Doing business without advertising is like winking at a girl in the dark. You know what are you doing, but nobody else does.

The better the product, the less that has to be spent advertising it. The best advertising is done by your satisfied customers. The stronger your customer loyalty, the less you have to spend on advertising. First, most of your customers will come back without you doing any advertising.

How should you develop your advertising? You have to make decisions on the five Ms of advertising: mission, message, media, money and measurement.

• The ad’s mission can be one of four: to inform, persuade, remind, or reinforce a purchase decision. With a new product, you want to inform and/or persuade. With an old product, like Coca-Cola, you want to remind. With some products just bought, you want to reassure the purchaser and reinforce the decision.

• The message must communicate the brand’s distinctive value in words and pictures. Any message should be tested with the target audience using a set of six questions.

• The media must be chosen for their ability to reach the target market cost-effectively. Besides the classic media of newspapers, magazines, radio, television, and billboards, there is a flurry of the digital/online media, including e-mail, digital magazines, online advertising, social media strategy, online videos, mobile advertising, newsletters and blogs. Media selection is becoming a major challenge.

• The money. The ad budget is arrived at by pricing the reach, frequency, and impact decisions. This budget must take into account that the company has to pay for ad production and other costs.

• The measurement. Ad campaigns require pre-measurement and post-measurement. Ad mock-ups can be tested for communication effectiveness using recall, recognition, or persuasion measures. If online promotions are drawing in more prospects than TV ads, adapt your budget in favor of the former. Don’t maintain a fixed allocation of your advertising budget. Move ad money into the media that are producing the best response.

How much should you spend on advertising? If you spend too little, you are spending too much because no one notices it.

Call today our Business Development Expert to help you create the most profitable advertising strategy, or send us email at contact@creativeatwork.ca