I was watching an episode of Shark Tank that Lori Greiner (known as the “Queen of QVC” and “Shark with a Heart”) appeared on, and she was lamenting an inventor’s poor business strategy. The inventor was more consumed by suing knock-off competitors than building a brand.
Greiner suggested to the inventor that, instead of litigation, she should shift her focus to brand awareness, growing her market share and bringing new products to market. She and the other Sharks were shocked to find out the inventor had spent $0 on advertising.
While you likely know you need to advertise and build your brand, you may not know how much to budget for advertising or where that money should go. Here are some tips to help you get started.
How Much Should You Spend?
There are countless recommendations for calculating how much you should spend on advertising. Some say a conservative 1% of revenue. Others push the envelope to as high as 8% of revenue, dependent on your net profit margin. In truth, there is no magic number. It depends on the size and competitiveness of your market, and how many units you need or want to sell.
Overall, your ad spend should be something you see, feel and accept. More importantly, view it as an ongoing investment rather than a cost or expense. You’re doing it because you expect a return, whether measured in dollars, impressions, clicks, calls or any other metric you choose.
What Should You Spend On?
The good news is that you have a world of options to use your advertising dollars wisely: social media, search engine optimization, content marketing and email marketing to name a few, along with the more traditional channels such as print and radio. Get into it and have some fun! There’s a reason why the most recognizable brands continue to advertise heavily despite dominating a large share of their respective markets. Even better news: You don’t need to have their budgets to see success.
Digital Can Be Cost-Effective
If you have spent little to nothing on advertising in the past, or if you’re wary of the kind of results you’ll get, it’s not realistic for me to tell you to flip the switch and go all in. A great way to warm up is with a digital campaign. For example, it only takes a modest ad spend to tap into advanced targeting and reach your audience directly through social media ads. Then, retarget the people who click on those ads so you continue to build brand awareness. Just remember that if you go digital, you better have an impressive and user-friendly website, or the digital ads might need to direct viewers to a separate campaign landing page.
Don’t Sleep On Traditional
Did you know that nearly half of people who see a billboard remember the specific ad, or that a study on radio ads for retail showed a 22% percent lift in store traffic?
Digital gets all the buzz, but traditional advertising continues to stand strong. One website even called billboards “the hottest advertising trend of 2018,” with plenty of punch to back it up. Aside from weathering the digital wave, traditional mediums are finding ways to integrate with digital ones, e.g., digital billboards, online magazines and ads on streaming platforms such as Spotify. If you have the budget, I strongly recommend you consider digital and traditional in tandem. This allows you to reach the masses and tightly target at once.
Where To Start And Where It Leads
If your business is growing and you feel uncomfortable fueling that growth with advertising, it’s probably not the advertising itself that you don’t believe in. Your first step might be to build a stronger brand. No matter where or how you advertise, all roads lead back to branding. Your mission needs to be clear and your message consistent for advertising to work. Better branding leads to better advertising, and better advertising drives better branding. That’s the beauty of buying into it all.