Anyone that is involved in the decision making process of advertising or marketing a product or service has a real responsibility and many tough decisions to make. Type of media to utilize, who to advertise with, to utilize an advertising agency or do it on your own, demographics to target, how often to advertise, how to get the most exposure for the amount of money, and finally, how much to spend and how often.
Before you can decide how much to spend on your advertising and marketing campaign, you must decide on how often you plan to advertise. Many experts say the best time to advertise is all the time. When business is really good, advertise for even more business, but even more important, so that business doesn’t get bad. After all, every business has it’s down times, so help to eliminate or shorten them by advertising during the good times. When business is really bad, or a startup business, since you need to increase your profits, and usually the two best ways to do so is the control your expenses and to increase your customers.
Before going any further, I must address one of the many things in life that amazes me. Many businesses, in their wisdom, budget their advertising dollars and stay on budget year after year. Although, I can understand their thinking, I can never understand when a business comes across a method of advertising that is producing large unexpected numbers to their bottom line, yet still cancel because they will be going over budget. Isn’t the idea of advertising to increase your bottom line, and if so, you find a way of doing more than you ever expected, you should continue to advertise and adjust your budgetary problems. I have seen advertisers cancel their ads because they have gotten too many new customers. What, I say, while scratching my head in amazement, is always my response to this comment.
Now, to how to spend your budgeted advertising dollar. First of all, you’ll need to figure out the percentage of your incoming revenues that you can afford to spend. Don’t use your current incoming revenues, but use a projected income, including new revenues generated from your sales and marketing campaign. Please keep in mind how much you’ll be getting in return in new profits from advertising. Let’s say, that the profit from one new sale would be $1,000. First, figure out how many new sales you’ll be making in a year’s time, and add that amount to your bottom line. So, let’s say you did your home work, and found a way to advertise that is going to make you 20 new sales in a year’s time, or $20,000 in additional revenues. Also, should you be wrong and realize that instead of 20 new sales, you’ll be getting 50, re-adjust your advertising budget to include the additional revenues.
There are no guarantees in advertising. By being careful, doing your homework on the ways to advertise, and carefully monitoring the results of your advertising campaign, you should be very successful.