3 Ways to Get Better Ad Buys
3 Ways to Get Better Ad Buys
Clay Dennis
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Buying advertising for a small business can be confusing and expensive. As such, business owners like you may be tempted to slash your ad spends now that the economy has shifted—but doing so can have adverse consequences for your company. Instead, you should continue buying ads, but you should do so in a methodical way that ensures every dollar that’s going out eventually puts money back in your pocket.
To be clear, I don’t profess to be an advertising expert—because I’m not.
But you don’t need a marketing degree to be advertising savvy, and the suggestions below are all things I learned and implemented throughout my journey as a small business owner. That said, here are three simple strategies for getting better ad buys.
You don’t need a marketing degree to be advertising savvy, and the suggestions below are all things I learned and implemented throughout my journey as a small business owner.
Strategy 1: Think of Advertising as an Investment, Not an Expense
Just like any other investment, advertising has to bring returns, or you’re better off just keeping the money in your pocket.
If you invest in stocks, gold, or real estate, you likely check to see how that investment is doing regularly. If it’s bringing in a good return, you’ll probably keep investing. But if it starts to wane or isn’t producing a solid return on investment (ROI), it may be time to restructure your plans or make a major shift. If you can get a 6-8% return on even the simplest investment, then shouldn’t your advertising dollars be held to a similar type of standard?
So how do you measure the returns of advertising? It’s simple: Create a checklist of your expectations (more on that below) that all your ads have to meet. Then, develop a set of key performance indicators (KPIs) to track the progress of the campaign during its run.
Advertising has to bring returns, or you’re better off just keeping the money in your pocket.
This article is brought to you by Associated Energy Systems.
Strategy 2: Understand the Terms “Reach” and “Frequency”
In advertising, “reach” and “frequency” are terms used to define the number of customers you can reach (reach) and how many times you’ll reach them (frequency). This information should be readily available from the advertiser you’re working with, and it comes from an algorithm they use internally.
While every industry and customer segment is different, there’s a number out there that works well for you. Mine was 3.5. I wanted to reach each key customer 3.5 times per week. Now, the higher the reach, the more expensive the frequency will cost you and vice versa. So you don’t have to reach 100,000 people with every ad you run.
To make things more affordable and financially efficient, I used to target a local TV morning schedule for two weeks, then shift to another station, then back and forth—but only from 6:00 to 8:00 in the morning. Evenings were expensive, and people got home at different times every night of the week. Some have after-school sports or other activities (like church, scouts, and so on). But people get up at pretty much the same time every morning, and they usually like the same channel every morning. Of course, I didn’t reach 100,000 customers by using this method; instead, I reached fewer customers multiple times per day and per week. That really worked well for me.
No matter your specific situation, make sure you ask about the reach and frequency numbers of all your ad campaigns before you agree to them.
No matter your specific situation, make sure you ask about the reach and frequency numbers of all your ad campaigns before you agree to them.
Strategy 3: Develop A Checklist
Finally, it’s important to take time to develop a checklist that each and every advertising offer you’re given has to meet prior to signing anything. This simple list of checkboxes can keep you from wasting ad dollars on the seemingly endless string of “special offers” you’re presented with every week.
As a starting point, here’s a list of advertising questions I used to ask myself before buying any ad campaigns.
- Question 1: How much revenue should this campaign generate to make it worth it?
Remember that generating $10,000 in new revenue means nothing if your ad campaign costs you $10,000. So if you are going to invest $2,000, $5,000, or more, how much do you want to make in return for the effort and risk? Just remember to be realistic and patient in your expectations.
- Question 2: Will this campaign reach my ideal customers?
Knowing your demographics is super important here. Information like income, family make-up, and your defined service area should match the ad buy you’re being offered. If it doesn’t reach customers who can use or afford your product or service, take that money to Vegas for the weekend and at least have some fun watching it be wasted.
- Question 3: How many customers do I want to reach?
Don’t just say “all of them.” Don’t be lured into the idea of attracting thousands of new customers if you don’t have the resources to handle dozens of new customers. Advertising to 400,000 people may make sense if you’re a pizza shop or restaurant. They need several hundred customers per week. But the same strategy may not be effective for a lawn mowing company with two crews that can be sold out with eight customers. For example, I was once pitched an ad buy from a local TV ad rep who told me I should have an ad during a ballgame that 400,000 people would be watching. The pitch suggested that for $3,500, my cost per customer would be pennies. But that math only works if 400,000 people show up. And what the heck would I do with 400,000 customers? I only have 14 parking spots out front! The truth is that if 1% of the viewers came in, I’d have to service 4,000 new customers. I might get 4 new customers, and at $3,500, my cost per customer would be $875.00 each. And that’s if 4 came in. Would that really be worth it?
- Question 4: How long will the ad buy run?
Always have a date in mind that your ad campaign will expire. Leaving the same ad up for too long can have adverse effects, especially if customers grow tired of seeing it.
- Question 5: How will the campaign’s success be measured?
You’ll need a way to “review” your new ad campaign, just like you’d review a new employee. After a few weeks, you should review to see if your campaign is yielding results or not. If not, don’t just ride it out. Make a change!
Simply put, you don’t need a marketing degree to make smart advertising decisions for your small business. Instead, you just need to treat advertising as an investment, understand your reach and frequency, and stick to a solid checklist. These simple steps will help you get the most bang for your buck and see real returns on your ad spend. For more information about making the most of your ad buys, feel free to contact Part Time Business Partners today!
This simple list of checkboxes can keep you from wasting ad dollars on the seemingly endless string of “special offers” you’re presented with every week.
Clay Dennis
As the President of Part Time Business Partners, Clay Dennis provides customized coaching services that focus on change management, leadership, team building, and process improvement. His mission is to empower leaders like you to implement positive and sustainable change in their organizations, and to align their actions and values with their vision and purpose.
