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How to develop an advertising strategy

“Half the money I spend on advertising is wasted; the trouble is I don’t know which half.” John Wanamaker (US Department Store Merchant) 1838 - 1922

Never has a quote been so transferable across industry sectors as advertising is one of the most difficult strategies to monitor.

Nearly all businesses must promote themselves in some way to gain added business and find new customers or clients. Advertising is often the most effective approach for those businesses with large numbers of potential customers or clients in clearly defined market segments. If your advertising strategy is developed properly and executed well, it can prove far more cost-effective than you might initially assume.

This article will highlight:-

Defining your promotional objectives and deciding if advertising is appropriate.

Determining your advertising budget.

Establishing where, when and how to advertise.

Measuring your effectiveness.

Your Objectives

Before you decide if advertising is appropriate you need to define what your objectives are. Your overall objective might be to increase sales, however your promotional activities might be meant to produce more intermediate results which would ultimately make sales easier to achieve.

Define your objectives using the SMART criteria (specific, measurable, agreed, realistic, and timely) against which you can determine if advertising would meet your needs.

You may need to raise your profile or change how customers and clients perceive you. Building a compelling brand identity and generating awareness of its presence within the marketplace can help to boost sales considerably. Or you may simply need to communicate a very specific one-time message to your customer base, informing them of a special offer, expansion of your services or new product developments.

You might wish to stimulate immediate action from your existing customers by encouraging them to visit your premises or register their details to be added to a mailing list or newsletter circulation. Maintaining regular contact and communication with your customers and clients ensures your company stays at the forefront of their mind, increasing the chances that they will return to you for additional business.

The Mix

Will advertising be the best and most cost-effective means to achieve your promotional objectives? You must understand who you are trying to reach, whether they share similar characteristics and whether they are the decision maker/end user or an intermediary. You must know which media source is likely to reach a significant number of your target audience; advertising is only effective if it reaches enough of the right people.

Additionally, the message you intend to communicate must be suited to the form of promotional activity you are considering. Generally speaking, advertising works best with short, clear and concise messages. This must be consistent with the image of your company as well or it is likely to create confusion.

Advertisements are dependent on a relative degree of saturation which often requires time. Can your objectives wait for this level of saturation to be achieved or should you consider more inexpensive and immediate alternatives.

The Budget

Perhaps the best way to determine how much your company should spend on advertising is by looking at your competition. If they have been advertising heavily do you need to at least match their efforts to remain competitive? Also, if a new competitive product has been launched you may need to counter this threat.

You should refer back to the objectives you have set for yourself. You must spend according to the needs you have identified; otherwise your advertising will prove largely ineffective. If you are looking to increase sales margins or generate new business, you must weigh the cost of advertising against the expected returns from increasing your sales margins or the lifetime value of a new customer or client.

If you are hesitant to invest in your advertising because you fear it may not prove adequate to meet your needs, you may wish to consider other alternatives. Be certain that you have refined your message as much as possible and that advertising is the right choice to meet your needs. Be certain that your budget is realistic and justified; the expected returns must be enough to cover the costs of your promotional activities.

Type of Advertising

The first step to deciding what type of advertising you should employ is to define your market segment and target audience. You must then establish which type of advertising is most effective at reaching this audience. Your decision should take into account your available budget and time scale that you are working towards.

You might wish to look where your competition is advertising as well as asking members of your target audience what they tend to read, listen to or watch. If your budget will allow it, you should consider using a mixture of advertising sources: traditional, new media and non-mainstream. There are obvious advantages to widening the cast of your net; you would be able to monitor each stream and emphasise those sources that prove most effective.

If you are looking to choose a newspaper or magazine, you are best finding the trade publications that cover the industry or sector you are targeting. You can request readership profiles from individual publications and research circulation figures from the Audit Bureau of Circulations (www.abc.org.uk). It may be wise to compare and contrast advertising rates for different publications as well as different advertisement sizes, positions and types.

You then need to select the type of advertising that most suits your needs. Make sure that your chosen stream(s) of advertising will reach a large proportion of your target audience. Try to ensure that your chosen stream(s) has an image that is consistent with your own. Make sure that you are fully aware of how much your advertisement will cost to produce and how much it will cost you to run it. You do not want any nasty surprises later with unexpected cost increases or confusion as to what exactly you have asked for.

Always look to investigate your options for negotiating a good deal. You may get a discount for bulk advertisement or for repeat advertisements. You may be able to reduce the cost by getting last minute space or even be able to negotiate a larger add in a better position for the same price. Smaller publications may be more willing to negotiate, but don’t fail to try with the larger ones as well. Remember rate cards are not set in stone.

The Particulars

The message and content of your advertisement will be determined by the objectives you identified at the start. Those objectives will help decide which aspects of your product or service you will need to draw attention to. Your objectives should also provide you with an indication of when you will advertise and for how long.

You should be certain that your advertising choice is appropriate to the needs you have identified, that your message is focused and that it is directly relevant to your target audience. You must demonstrate an understanding of the issues that motivate your target audience and make sure your message contains a clear call to action in order to be successful. Put yourself in the mind of your customer, would you respond to your offer?

You should also be aware of the timing of your advertising campaign. You must know when your target audience is most likely to be receptive to your call to action. In addition, you should plan to launch your campaign far enough in advance for your objectives to be met on time, bearing in mind the time required for your advertising to reach saturation and for your target audience to respond. You must also account for your own internal ability to react to the increased work load and high level of enquiries likely to be generated from a successful advertising campaign.

Measuring Your Return

You will most likely measure the effectiveness of your advertising campaign against your objectives. If your intention was to raise the profile of your company you will need to conduct surveys within the market to learn how much of an impression you have made upon your target audience. However, if your intention was to increase sales it should be fairly simple to determine your level of success.

Most of your sales advertising can be monitored directly with a few simple techniques. Ask new enquiries how it was that they heard about your company. By using coded advertisements and asking new enquiries to take note of the code when they respond, you can track which advertisement was the source for each enquiry. You can then either adjust your campaign to emphasise the most effective sources or make note of these for future use.

A successful campaign will depend on a number of factors. Your staff’s ability to deal effectively with the increased level of enquiries will be a determining factor in your success. Your company must demonstrate its commitment to follow through with new enquiries, providing additional information when requested and delivering what was promised or offered from your advertisements. You will only have one opportunity to make a first impression.

You might want to calculate the total cost of your campaign and weigh this against the volume of response you received. Other costs will be for things like printing, design and copywriting, the cost of ad space, brochures and supplemental promotional materials as well as fulfilment costs (goods and materials, postage, delivery, employee costs and so on). You must at least be aware of the various costs involved in your advertising campaigns – what you cannot measure you cannot manage.

Some advertisements may generate a good proportion of enquiries but not convert to very many sales; this needs to be investigated and the problem resolved quickly. Your literature may not be providing enough of the right information (or too much of the wrong information), you may be falling short of your promises or offers in the advertisements, your staff may be under trained and incapable of dealing with the enquiries properly or your pricing structure may be miscalculated for your target market.

Mechanics

Are you able to manage your advertising in-house or do you need to outsource? It has been proposed as a rule of thumb that if you intend to spend more than £10,000 on advertising you would be well advised to seek help from an agency. Typically, agency fees will amount to around 15% of your total budget unless you have a retained agreement and the advertising forms part of that contract. Some agencies are able to negotiate reduced rates on advertising, sometimes lowering the cost by as much as 10% – 15%, in effect paying for themselves. Do ask whether they will pass on any negotiated savings to you or if they typically expect to keep this in addition to their fee.

Using an agency can often be a more cost effective option, allowing you to benefit from the strategic guidance, experience and support of a professional. Consultants often have experience of working in a variety of sectors and may be more accustomed to working with small to medium-sized enterprises.

Once your advertising campaign is up and running, you may then want to manage it in-house, particularly if it is simply a case of renewing existing adverts etc.

Finally, look at the features lists for your chosen publications to see if you can tie into any of them – some publications look more favourably on advertisers who wish to provide editorial comment or articles and this could result in additional free publicity for your company.