Written By A Non-Advertising Guru!
Recently I was approached by a client about a potential Advertising opportunity they had received. In fact, they had received more than one opportunity for advertising and called to ask me if I thought it was a good idea and what would I suggest….
Well my friends, I am not here as an advertising guru, but I do understand ROI’s…(Return on Investment). With some advertising opportunities we take a chance (which is natural for an entrepreneur), and we track it to see if it works and if it does great! If it does not, we may be wise to dump it! But should we always take that chance or can we make a decision based on real numbers? After all it seems that money flows out the window faster than it flows in and we’d like to keep more than we spend (yeah profit!). Let me share some thoughts with you on attempting to determine a ROI in advance and assist you in making these really important advertising decisions and help you determine if the risk is worth it for you!
First of all, consider a marketing budget for the year and break it down into monthly installments. Say I am willing to spend a total of $5,000.00 on Advertising for the year and that would give me $416.66 as a monthly budget. It’s not a lot of money, so I better spend it carefully and effectively! Print advertising (rack cards, business cards, networking groups, ads or publications in magazines), break it down, look at past expenses and how quickly you have or have not gone through your advertising dollars and did you make money off of the investment; if so, how much? You need to think about how to best use your funds to your businesses benefit! Can you stick to that budget as well is also a good question. Planning in advance allows us to make smarter decisions that do not result in regret and poorly spent funds. It also helps make it easier to say no to the wrong opportunities!
Establish a target market. This is something that I was really challenged by! Who is my dream client? Where are they? What do they look like? What do they read? Where do they congregate? Why are they my target market? Are your advertising dollars hitting your target market? If not, the dream client will slip through your fingers and you will waste a lot of money pulling in the type of client that you do not want! That to me is a waste of money.
Research the effectiveness of that advertising dollar (this can be free). If I am being asked to publish an ad in a magazine a good question to ask would be… “Who in my field did this before me?” Can I connect with them and ask them how much business they received from publishing an ad in this magazine? Are they able to put a number on it (Magazine publications often cost money!) Did it just cover the cost of the advertisement or did it produce a profit… this is a very simple calculation…. Income Generated (from that advertising) Less Cost to Advertise = R.O.I. This does not guarantee your advertising dollars will work, but it should be a good indication!
Also, find FREE ways to advertise… ok I’m shooting myself in the foot here because I have to confess that I do no blog enough and apparently should see a blogging expert to assist me in this. What blogging does for my business can be a great thing! I can establish a following, offer great advice (that often we would charge for), assist people in my community and advertise my expertise for free on my website (website optimization!), Facebook, twitter and linked in! All very effective means of communication and free advertising if set up correctly! It can increase your reputation as a business, and give you the community recognition that your company needs!
Time… here is another big one. You will not always see your ROI right away. Did you give that advertising campaign enough time to build a readership? A following? And allow your business time to receive the Return On Investment.
Lastly, but very importantly, TRACK! Track your numbers related to that advertising campaign. Your bookkeeper is able to assist you with this so you can clearly see your Return On Investment. It’s a very simple step to add into your bookkeeping practices and an invaluable one! ASK clients how they heard about you (Networking Group Referral? Magazine? Website? Other Social Media Outlets?) Without this tracking you will never know where you are generating the right income and the right client and you will not know where to invest your ADVERTISING dollars in future!