The Power of a Demographic
There are many different media types ranging from the Newspaper to the World Wide Web. Placing an ad is easy; the challenge comes when determining where to effectively place the ad to maximize the full potential. First key factor is to consider all aspects of the demographic in order to understand how to best capture their attention. Young adults for example are highly engaged with their computer and hand-held devices, and are 68 percent more likely to make an online purchase than the average Internet user. Now break that logic down into males vs. females. Young adult males spend a great deal of time playing video games or sports, and are generally TV watchers. Females on the other hand are more inclined to read a fashion magazine, and are also TV watchers. Television in general is a very effective medium, which makes it a pricey, yet effective option.
Measure Advertising Effectiveness
In addition to considering demographics, it is important for business owners to also consider the return on investment (ROI). By utilizing sales and advertising data you can create simple and predictive models for measuring effectiveness of an advertising campaign where it is critical to ensure your data is clean and consistent. In addition, evaluating “what if” scenarios in a predictive model will help guide you in future marketing investment. Tracking key performance indicators (KPI’s) throughout your campaign will also help ensure you are keeping good records for future modeling needs.
Your Message Matters
The most effective advertising element is in the messaging. The right messaging that speaks to the heart, paired with the right advertising medium(s) is a recipe for success. Once you have your message, next you will determine which medium is going to give you the best ROI. The one that is right for you depends entirely on your business and your budget. There is no “one trick pony” or “magic bullet” in advertising. A solid message, consistent budget, and an allocation of budget to a balance of advertising outlets will yield great results!
When In-House Marketing Makes Sense
When considering the benefits of hiring a marketing agency vs. benefits of an in-house staff, there are a few key points to consider. First, consider your business size. Large businesses with 150+ employees, or a staff of 50+ sales positions should definitely have an in-house marketing department. With that said, it is quite common to hire an outside agency in conjunction with an in-house team to maximize efforts. Other important in-house factors are targeted product and service familiarity, staff control, and software control.
A Marketing Agency Can Take Your Business to the Next Level
Most successful marketing agencies have an internal team of 15 to 50 people with a wide array of skill sets. Within that skill set are graphic designers, creative directors, account managers, and sales managers who together, are a team of awesomeness dedicated to seeing your business succeed! From negotiating with media outlets, to creating cutting edge design, a marketing agency can take your business to the next level. Media outlets appreciate a good marketing firm, and with that come volume discounts and freebies which are passed on to you.
This also means you can eliminate your cost of employing marketing personnel. In addition, you won’t need to manage the operational duties of marketing production. Instead, you get to focus on other important aspects of your business, and leave the marketing to a diversified team of professionals. In the chart below, it details the annual cost of one senior, middle, and entry level marketing employee including software, salary, and benefits. By hiring a marketing agency, your average annual spends would make more sense considering the package that comes with it.
Allocating a Marketing Budget For Business
A very common question posed by business owners who are considering a viable marketing budget often ask: How much does should it cost to market my business?
Your Business Type Matters
Consider the business owner who is approaching a grand opening and wants to attract customers in a big-bang fashion. Or consider the business owner who has been marketing for many years, using the same media source that has worked well over the years, but knows more is needed. Both are great examples of business owners who realize the full potential of marketing and the great rewards that come with a successful balance of media. The biggest factor for each decision maker is ultimately; what is the cost of marketing, and how will it make the most impact on ROI?
Important Factors to Consider
There are handful important factors to consider when allocating a marketing budget. First step is to allocate a percentage of projected annual sales; 5-15% is common, and is important to see what your competition is doing to keep up or even up your game. Second, your geographic location plays a role and costs are typically higher in metro areas vs. rural areas, as media in those markets will typically hit a larger population. Third, your media selection is a major factor in the costs. If you have a small business, certain media can be costly (production and media placement) and your budget could be better spent elsewhere, where it can be more targeted. Lastly, there are free alternatives that can be effective, but require effort and some creativity. Examples could include a ribbon cutting ceremony to gain free coverage in a newspaper or by participating in community events which helps generate word-of-mouth.
Plan on it!
Simply put, businesses need marketing to thrive in today’s economy. Budgeting and planning based on projected annual sales is a fundamental key to success. A strategic, long-term plan is effective and best-spent when hiring a full-service marketing firm who is familiar with various media options and how to strategize for a variety of markets and businesses. Make the most out of your budget and contact Epic Marketing today!