How To Allocate Your Advertising Budget 💲💲💲

Here’s the screen shot of the exact text I received from a client…

sioux falls advertising options

You can’t afford it.  You can’t afford to advertise everywhere. I know you’d love to… but there only a few advertisers in the Sioux Falls area who can afford to advertise properly on a lot of different advertising mediums.“So, now what… DU-ANE… you’re saying I can’t afford to advertise?!”No, that’s not what I’m saying.  I’m saying you waste big wads of money if you advertise in too many places, too thinly.What’s the reason you’re looking to advertise right now?  Here are a few potential reasons…You just got to the point where you want to GROW.  It’s because you’re hungry and you want a bigger slice of the local market…

  • OR you have more and more competition moving in year after year…
  • OR you’re new, you have competition, and you know you have to advertise if you’re going to have a chance at sticking around.

And if you’re not growing, you’re shrinking.  So, you’re going to have to set a budget and figure out the best way to invest that budget.I’m assuming you’re already doing some social media. Or at least have a few accounts out there. The first thing that most will want to do is get their logo and contact info in front of a bunch of eyeballs.  So, spending some money on social media ads can get your business in front of some new people… but it’s very limited.  To make an impact, you’ll need mass media.So you say…“Let’s see how much billboards cost. Oooh, maybe those digital ones would be good.”“What about those free magazines?”“And postcards.”“Might as well find out how much TV ads cost, too.”“Let’s get some radio ads going.”“Online. Everyone’s online.”You get the point. You want to be EVERYWHERE. You want everyone to know about you.  But the thing with advertising is… if you spread your message to thinly in front of an audience… they won’t experience your ad often enough to get your message to sink into their brain.  So, you’re just sprinkling and dribbling your message here and there and everywhere, and most of the audience is probably not even seeing or hearing it.People aren’t just sitting around waiting to experience your ads… we’re busy doing things.  Your ads will hit some people and miss some people.  The next day, they’ll hit others and miss others.  Hopefully, the day after that, your ad hits the same people again.  Hit and Miss.  Happens all the time.  And when your spread your advertising around too thinly… it’s miss, miss, miss, hit, miss, miss, miss, miss, miss, miss, hit, miss, miss…..WHERE TO PUT THE HEFTY PORTION OF YOUR BUDGET“Yup. Here it comes, Duane.  This is where you say RADIO RADIO RADIO!”You’d be correct.  Or TV.  But TV has its challenges that radio doesn’t.  And vice-versa (for those who don’t know how to “do” radio advertising effectively).  But to be honest… I don’t see TV commercials very often at all because we TIVO the shows we like… and use a lot of Netflix.A good radio schedule takes care of the REPETITION part.  More “hits” when it’s done right.  To a big audience. Repetition is so important in this busy world. People aren’t sitting around waiting to experience your next ad. We’re busy. It’s easy to miss us. That’s why finding a big mass media like Radio… plus the repetition… 2 out of the 3 parts needed to persuade people to do business with you.You don’t have to be everywhere.  You can’t.  And if you try… you’ll be massively disappointed in your advertising efforts.  But most good radio stations HIT a lot of people.  What if you could talk to 20,000 people, week in and week out with whatever you wanted to talk to them about?  You don’t think that if you convinced even 10% of them to do business with you within the next 12 months… that wouldn’t impact your business in a good way?  What if you eventually convinced 30 or 40% of them to give you a shot?  Whoa.  But that only happens when you say good things to the same group of people over and over.  Not annoyingly… or too frequent… but consistently.  Consistently telling your story.  Consistently making friends with a big group of people.  There’s tremendous power in that!And what happens when you expand to another radio station or two?  Whoa… now you’re really reaching a LOT of people.  And you’re doing it with enough repetition.Great advertising campaigns throughout history all have the majority of their budget put into advertising that utilizes the sense of SOUND.  We remember things longer when sound is used versus only visual.  It’s how the brain is wired. Don’t get me wrong.  There are strengths and weaknesses for all media.  It’s just that “sound” advertising has a few more advantages over “sight only” media (online, billboard, bus bench, mags, etc.).  Here are a few of the best ones…It’s INTRUSIVE (you can’t close your ears)

  • It sticks in our memory longer (it’s science)
  • You can paint any picture you want with sound (set the stage with the spoken word, instead of being limited to props – the only limit is your imagination)
  • You can personalize an ad more with sound (if I show you a picture of any dog, it’s just a dog… if I say, “YOUR dog” in an ad, well… that’s emotional – and when emotion is injected into your ads, that’s when you’re getting close to a home run)
  • You can speak to people for 30 or 60 seconds!  Not many advertising mediums can do that.

With a consistent radio campaign week after week, you’ll hit the low-hanging fruit… but you’ll also start doing something far more beneficial.  If you have a good STRATEGY, you’ll start the branding process with those who don’t need you right now.  And when you “brand” your company well, people will remember you when they NEED YOU. And that’s when your advertising is kicked up into a gear that you did not know even existed.Cementing your company into the hearts of people is the goal.  And that’s what we do for our clients.  The time we put into planning your advertising campaign is mostly used on your ad strategy and writing your ads. Because if that’s not done right… it won’t matter where you advertise.Radio is alive and well.  93% listen every week.  I have a nice handful of wildly successful clients who put the majority of their ad budget into radio.  It’s their “go-to”.  So, let’s make it work for YOU, too! For example, here’s a text I received from a client who’s on a 48-week, annual radio plan…  radio advertising text from Sioux Falls client

It doesn’t hurt to meet, have a coffee, ask some questions, and talk about your business goals.  We’re not right for everyone… but we could just be exactly what you need.Duane Christensen  (Account Executive / Ad Writer / Marketing Helper)Results Radio Townsquare Media – Sioux Falls605-940-7984duane.christensen@results-radio.com

How Much Do You Advertise?

How much do you advertise?  How much SHOULD you advertise?

How do you know if you’re investing too much or too little into some kind of advertising and marketing? Is there an easy formula?

Here’s the “simple” way to determine a general sense of “how much” you need to do….

How much COMPETITION do you have?  A little?  Then, you don’t have to advertise as much.  A lot?  Good luck.  You better have something to say that differentiates you from the competition or give people a reason to choose you instead of all the other businesses that seem exactly like you.

How much do you want to grow and how fast?  If it’s a lot… in a short period of time, then you better pony up some cash.

How complicated is your product or service?  Does “your target” easily understand what you’re offering?  Or are you going to have to really SELL them on it?  The more complicated the message (your advertising), then you’ll need a more complicated ad.  You’ll need a longer ad usually.  You’ll need to compare what you do to something else that is more easily understandable.  Compare what you do to something that almost everyone “gets”.  Or give us a scenario of why and when someone might need what you offer.  You could use a sentence in your advertising like, “It’s like _______, only faster.”   OR “Do you know how when you _______ and _______ and you’re thinking OMG I’m going to pull my hair out…well, we fix that.  We make that go away forever.”  (get my point?)

If you have a niche that nobody else is promoting, but is desirable to your target, then you don’t have to have a very complicated message.  Just get attention with a good headline and be crystal clear with your message.  Don’t overload your ad with things you don’t need.  Don’t force any humor into your ad if you don’t need to. BUT… a little humor in ads helps them get absorbed and listened to better. You just can’t force the humor if it doesn’t fit naturally.

Hey… if you don’t have much competition… congratulations!  Then, all you have to do is let enough people know that you’re open for business and then serve those customers extremely well so they tell others and so they come back again and again.

BUT… I’m thinking you might have more competition than you think you do.  It’s just not “traditional” competition or someone that’s in your precise type of business.  For example, if there are no INDOOR go-cart tracks in your market, you may think you’ll have no competition if you open one.  (Great idea!  Especially, in a place where winters get stupidly cold.)  But during the summer, you’ll have some other competition – a few other tracks.  You’ll get all of the winter entertainment seekers though, right?  Not so fast.  That word “entertainment” is the key to focus on here…

We only have so much money we can spend on “entertainment”.  You might think it’s going to be a perfect weekend for everyone to come out and hand over their cash… but that weekend might just be the opening of the latest Marvel movie, stupid humor comedy, or the next Star Wars film.  You’re competing with every other “entertainment” type of business, not just go-cart tracks.  Movie theaters, trampoline places, sprint car tracks, local sporting events, ski bumps, etc.

And if you’re a restaurant that serves the same kind and caliber of food as 35 other restaurants in a 3-mile radius, good luck.  Then, you for SURE need to keep advertising consistently.  Part of advertising for restaurants is to remind us that you’re there and that you’re an option.  Because we’re getting bombarded with offers and coupons and half-price deals every day.  By the way… why not just advertise why you’re good and how you’re good and tell us a good story along the way so we remember you?  Like on the radio.  Then, you won’t have to give away all your profits with coupons.  Then, when you attract the new customers, you better be able to back up what you’re saying in your ads.

Are you a MATTRESS STORE?  Oh Mama.  Did you know that JCPenney sells mattresses?  And Menard’s? Dude.  If you’re a “middle man” mattress store or a furniture store that sells mattresses… you’re competing on price and you probably offer every crappy mattress out there. And maybe a couple decent ones, but you’re overcharging everyone grossly. Good luck.

I think the only chance you have is if you’re a mattress company that builds your own. Someone who has a proprietary “mattress formula”… and you actually care about your customers. You have to care that you’re producing a good product… and you have to NOT mark it up 1000%.  THEN, you’ll have a shot in this crazy Sioux Falls mattress market.

BECAUSE YOU HAVE SO MUCH COMPETITION… Your mattress advertising will have to push the limits.  Both your Ad Budget and your Ad Content has to push their limits. You’ll have to be consistent with your radio ad schedule and your ads will have to cut through the mattress advertising clutter and “puffery”.  They’ll have to demand attention.  But you’ll have to make a lot of friends with your ads.  Cause people to fall in love with your fresh approach to helping people sleep better.

Sorry for the long mattress scenario. But it’s the same if you’re in any other category with a lot of competition. Your advertising needs to be consistent and have some kind of element within it that will help people REMEMBER you. And that doesn’t happen by just inserting “the facts” about your business into your ads.

Assess your complete market situation before you decide to pump any money into something.  You could be spending more than you need to… or not nearly enough to make an impact.

Keep the “fat” out of your ads!  Don’t fill me full of clichés and fluff and B.S.  Give me some substance.  Entertain me a little.  Keep me listening.  Wow me.  Because I have plenty of other crap to do.  It won’t take much for me to ignore every ounce of your wimpy and gutless advertising.  There’s an imaginary line you shouldn’t cross with how “creative” or “weird” or “out there” your ads are.  But the best performing ads will go right up to that line and flirt with it for a bit.

The more “beefy” and full of flavor your ads are… means THEY WORK BETTER.  Which means you get more big bang for you buck than the average, crappy ad.

For a general “ballpark” local advertising budget, take a percentage of your revenues (or your next year’s revenue goal if you’re looking to grow even more), like 5 to 12% depending on your competition and your profit margins… and stick to it.  Adjust it annually based on how things are going overall.  Of course there are many factors to consider – let me know if you want to talk “budget” or “cost of exposure” in more detail.  Because maybe you’re a retail store that would benefit a lot more by moving to a higher-visibility area instead of putting the extra money into advertising.  Maybe you wouldn’t.

How much should you advertise?  Not too much.  Not too little.   Let’s find your sweet spot.  We can do that by assessing your competition, their advertising, their ad message, and their ad frequency… and then compare that to yours.

Ok, maybe there’s not anything “simple” to figuring out how much to advertise.  But guess what?  There is NO EASY BAKE FORMULA that lets you off the hook of actually learning a little bit about this (or finding the right person to HELP you think it through).  You WISH there was a formula!  You and every other business owner.  Sorry Charlie.  Hey… you can always talk to me.  I’m the guy who has your best interest at heart and who knows how to make advertising work.  And I’ll let you know what kinds of things to avoid overpaying for… or avoid completely.

Do you have a specific marketing question you’d like some clarification on? Just let me know. 🙂

Duane Christensen
Results Radio Townsquare Media
Sioux Falls, SD
duane.christensen@results-radio.com
605-940-7984

Budget For Advertising

If you don’t have an ad budget, you need to set one. Usually, anywhere between 3% and 12% of revenues. It depends on whether you’re a service biz or a retail biz, profit margin, location, and how aggressive you want to be (competitive landscape, speed of desired growth, etc.).

If you’re a retail business, then your “visibility” plays into it. When you’re in a high traffic area, your rent is most likely higher, but so is your exposure. So, you don’t need to advertise as much. If your location is low traffic (cheaper rent), you need to increase your exposure (increase ad budget). Your profit margins also play into your ad budget, obviously. You’re going to be able to spend more on attracting purchasers of your product when you’ve got a 50% markup…versus 15%. Service businesses generally budget between 7% and 15%.

You need to advertise because you always have a competitor gunning for more market share. And you may THINK people know about you…but the reality can be quite different. And people can “know” about you…but often FORGET about you when the time comes for them to need what you have to offer.

Once you SET your ad budget, you might feel the need to distribute your ad dollars among many different ad mediums. Stop! When you do that, you end up “sprinkling” a few people here and there. To make advertising work, you need to “soak” your audience. Why? Because everyone is busy. And when you spread ads thinly across multiple ad mediums (radio, print, TV, Cable, magazines, billboards, etc.), they don’t get heard or seen enough times to make a difference. Start with ONE ad medium. And dominate it. You don’t have to try to reach everyone. If you want multiple ad mediums to work well together, the way Budweiser and Apple do it, you better have a pretty big ad budget.

If all you have the budget for, is a tiny cable TV program, that has about 1500 viewers per week…that’s ok. You have to start somewhere. You have to start getting into the minds of an audience repeatedly. And most importantly, when you create an ad message and campaign that gets attention and hits your prospects’ hot buttons (my specialty-wink wink), you start to bring in new customers. As you grow, then you can increase your ad budget and increase the audience.

If you have that small of an ad budget though, I’d recommend putting your efforts into making something stand out about your business. Get some word of mouth going about how you’re turning your industry upside down. Or take the time to make every precious customer you have…love you. Not like you. Love you. OR BETTER YET – instead of spending $200 a month on a small cable TV audience, you’d have better luck if you gave 20-dollar bills to 10 random people a month and say, “Hi, I’m ____ with _________. You should give us a try when you need a _________!”  And then walk away saying, “Have a nice day!” (Seriously, it would work better than the majority of sad advertising I see today!)

A good place to start with an ad budget…is on the RADIO. Radio allows you to communicate your ad message to an audience many times during a week at a much lower cost than TV or newspaper. Of course, you might think I’m biased because I work for Results Radio. But I decided a long time ago that my passion is helping small to medium-sized businesses GROW – no matter where I’m working. I’ve learned about the benefits and drawbacks to pretty much every advertising medium. Radio will always be my first recommendation to local businesses because of the power of sound (our memories prefer sound over sight only)…and the overall VALUE of it (you can air more ads, and I don’t charge you a nickel to make a new one).

There are lots of Radio commercial scheduling options. A good ad rep won’t bombard you with industry jargon and confuse the heck out of you.

You might get shown a $4500 per month ad schedule and think that it wouldn’t be too hard to pay for that with an extra few sales here and there. But you might also choke on your coffee if you saw a proposal of that amount. I’m not a fan of making up a schedule out of thin air with no budget to work with. The thing you need to know…is your AD BUDGET, remember? And not to “sprinkle” yourself out among multiple advertising mediums when you don’t have a lot of budget.

If you set the proper budget, have a great message to communicate to the public, and find a radio station or two to start out with…good things happen. New customers start finding you. New customers appear when you didn’t expect new customers to appear.

MY GOAL…is for my radio clients to grow and thrive and be as successful as they want to be. When that happens, I grow and thrive as well. See? Win-win.

Have a great week! Thank you for reading…and spreading the word about this cool radio guy you know.

Have a great day!

Duane Christensen

Results Radio Townsquare Media – Sioux Falls

605-940-7984

My work website: http://duanechristensen.townsquareinteractive.com/ (And if you’d like a business website like this, or nothing like this, give me a shout. I’ll point you in the right direction)

And if you have questions about the cost of radio advertising, which radio stations would be a good fit, or how to get started attracting more customers, don’t be afraid to ask. I like to help good businesses take a bigger slice of the market.