How To Put Together An Advertising Budget
Bob is excited about his new business. He secured funding. He
leased the building. He stocked it full of new gadgets. He hung
the sign. He posted a banner on his window that reads,"Grand
Opening!". And now he stands behind the counter, waiting for
customers to come flocking in. And he stands there. And he
stands there. And he stands there.
And then it hits him: No one knows about his shiny new store!
I've seen new and even established businesses make this same
mistake over and over again. Advertising is the last thing they
think of. They assume that since their doors are open and the
merchandise is on display, customers will come running in. But
they won't come. Not until they know how great your new business
is! And to do that you need to plan and execute an advertising
budget and strategy.
Many times I've been called in to consult with a new business to
help plan their ad strategy well after their stores have opened
when in fact, this is something that should have been done
during the initial planning stage.
So is it too late? No, but sometimes it's a major sticker shock
to those who did not put a realistic plan together from the
start. Remember that advertising, like your store and your
merchandise, is an investment towards your profits.
But let's say you're like Bob and your business is already up
and running. How do you put together a realistic ad budget? Well
most people use a percentage of gross sales as a means of
figuring this out. If however, you're a new business owner with
no prior sales, you can base it on industry standards. Use the
web and search out other related businesses for a guide. Once
you've figured what your gross sales should be, think about
using 3 to 5 percent as a starting point for your ad budget.
Another factor to consider when planning an ad budget is that it
should encompass all aspects of your advertising from media
placement to creative costs and production of your ads.
And remember: advertising must be done with consistency. Let me
write that again. Advertising must be done with consistency.
When planning your ad budget, make sure you allot enough funding
to allow it to last throughout the year whether your sales will
be spread out evenly or are cyclical. If you spread your budget
too thin, chances are your ad campaigns may not be heard or seen
enough to stay in the minds of consumers. And if your business
is brand new, you'll want to plan on spending more at the
beginning for your initial start up campaign.
Some businesses make the mistake of advertising strong for about
three to four weeks and then they stop. Keep in mind that
consumers have very short memories and with 3000 plus
advertising messages that pummel their brains everyday, it's no
wonder! That's why you have to stay in the public's eye
consistently. Oh, and it also helps to have a clever message but
we'll talk about that in another article.
Once your ad budget is established, the type of advertising you
use will be based on your specific business but normally if your
business is consumer based, even in these modern web based
times, traditional media such as radio, television, print,
billboard and direct mail should still play major roles.
Many times I've helped clients put together an in-house survey
for their customers to fill out. This can be helpful in
determining what type of advertising they'll need as well.
Questions like, "What radio stations do you listen to?" "Do you
subscribe to the newspaper?" and "Do you shop on-line?" can be
useful in getting to know your customer's habits as well as how
to attract more like them.
Consulting an advertising agency is a very good way to get
started as well. To find a good agency, try contacting other
business owners you know for a referral or perhaps an
established business whose advertising style and creative
appears to fit your goals.
Remember: planning your advertising budget and strategy is as
important as the products your trying to sell. Think about your
advertising now and you'll never end up like Bob: standing
behind the counter waiting for customers that never come.