As the owner of a Seattle advertising agency, I can relate to business owners who are weighing heavily their advertising investments for 2018. With media fragmentation and 100+ cold calls a month from media reps pitching “the best opportunity”, “fire sale prices” or “their best station/website/audience” etc., how is the owner of a company (who has a million other things to deal with) supposed to have time to really research and know what is and isn’t a good advertising opportunity? It’s extremely challenging to get unbiased information from advertising sales people because they’re like all sales people, they’re commission paid representatives of media companies, paid to sell you the advertising solutions that their employer has for sale. They can’t be unbiased. Even the most ethical rep can’t recommend a solution that’s not offered in his portfolio. Similar to a financial adviser with certain funds to sell, if you ask your adviser about investing in real estate, is he really going to steer you toward that purchase or is he going to come up with a “great” opportunity to invest in a fund that he sells and receives commission on?
So how are you, as the owner of a business, determining how to best invest in advertising?
Here are 6 tips for making better advertising investments:
1) Know your demographic.
Some businesses have broad demographics. They can cast a huge net and be successful because there are so many prospective customers. Other businesses though have narrow, niche demographics, that require a more targeted advertising approach. In both scenarios, it’s critical that the business owner (or marketing manager) understands who they are trying to put their marketing message in front of. If their demographic is Adults 18+ in the Seattle-Tacoma DMA, it’s a broad demographic and a broad reaching advertising medium is going to be best. If the target customer is Women 45+, with an annual household income of $200k+, living within a 5-mile radius of downtown Seattle; that’s a narrow demographic and requires a niche media plan that geotargets, income targets and gender targets simultaneously. Generally, a broader audience would have a lower CPM (cost per thousand) than a niche audience. It’s often worth paying a few more dollars per thousand impressions to reach a niche audience if your customers are very specific.
2) Know your budget and what the market requires.
The Seattle media market is #12 in the country (by size) as rated by The Nielsen Company. Market size directly affects cost of advertising because when you advertise you are essentially buying “eyeballs” and “ears”. Meaning that the cost of the advertising is sold based on the number of people who will hear or see your ad. Typically purchased as a CPP (cost per [rating] point) for TV and radio or as a CPM (cost per thousand) for digital advertising; ads are priced based on the audience size reached. Therefore, if comparing the same type of media, market to market, it will cost less per month to advertise in Portland than it does in Seattle because you’re reaching fewer people.
The challenge this presents local advertisers in the Seattle market specifically is that to advertise in an impactful way on TV, radio, digital radio, web, etc., the monthly investment is somewhat high. However, there are media sales people who are happy to sell you an advertising package that will initially match your insufficient budget. But if they have any experience at all, they know it won’t work, which leads to disappointed customers and no long-term business.
Advertisers are better off not investing in advertising, with an insufficient marketing budget. They would be wise to save up until a sufficient marketing budget has been established, one that will yield results. We work with advertisers to determine what that monthly budget is and provide realistic expectations for how long they need to advertise to see a solid ROI.
3) Establish enough reach and frequency to generate ROI.
“Reach” in media terms is defined as the number (or percentage) of the target audience that will be reached with an advertising buy. Frequency is identifying how many times each person within the defined demographic will have an opportunity to see or hear your ad. There are many theories on how many times each person needs to be exposed to an ad to respond to a CTA (call to action). For a long time, it was determined the frequency goal was 3. Now with more ad exposure than ever, experts use different numbers for different media. For instance, TV goals may still be to establish a 3 frequency whereas a display ad campaign may be 7. In fact, often with digital ad campaigns, advertisers will implement what’s called a “Frequency Cap” which restricts the number of impressions served to each IP address so that a user isn’t being bombarded with ads and an advertiser isn’t wasting money serving impressions to an uninterested prospect. Generally, in our Seattle advertising agency, we recommend the lowest frequency cap for Programmatic Advertising be 7.
4) Know your desired call to action.
Advertisers who need ROI to be quick and significant must tell the consumers what they want them to do in response to the ad. Even better results are seen when you give a consumer a “by when”. A “by when” is a timeframe. Ex) “Reserve your vacation package by March 3rd and receive 10% off using promo code EXAMPLE.” This kind of call to action encourages users to get off the couch, jump online and research if they’re interested. If an advertiser uses words without a call to action, ex) “Vacation packages available online at www.example.com”, there is no sense of urgency or incentive for the user to respond to the ad now. They assume they can get around to it when they feel like it and that makes for dismal results. You don’t have to discount to create an effective call to action. You can create other motivation with added values, events, etc. Failing to tell the consumer what you want them to do is a missed opportunity in advertising.
5) Track your advertising.
Digital advertising has created a double edge sword of tracking advertising effectively. It’s made marketing managers and business owners hyper sensitive to online analytics. 15 years ago, when few advertisers were running sophisticated digital advertising campaigns, marketing people had to create ways of tracking advertising that didn’t rely on daily metrics with click through rates, cost per clicks, cost per acquisitions and cost per thousands. They had to create measurable advertising by offering promo codes or specific offers that were unique to one media. The double edge sword is that it’s amazing for marketers to be able to track ad campaigns online in near real time. But the problem with that is that advertisers get so hooked on the data that they often lose sight of opportunities that still present great opportunity in traditional advertising.
We’ve had clients who have made the decision to focus 100% of their ad dollars online with no support from traditional media. While there are some scenarios where that makes sense, there are more instances that the traditional media would have really bolstered their online campaigns and the ROI would have been substantially greater had they been open to putting together a comprehensive advertising plan that used digital advertising in tandem with specifically targeted traditional media. If you’ve ever run TV advertising campaigns you know that when you get calls and emails, consumers will often tell you that they found you online. So, the big question for marketers is, “Did the consumer come to the website because they were told to visit the website by the TV ads? Or did they come to the website on their own, through organic search or through a digital campaign?” This creates a lot of attribution questions for marketers.
Our recommendation is to first thoroughly understand why you are investing in the media you’re investing in, know ahead of time how you are going to track traditional versus digital advertising, and be aware that looking at trends year to year, month to month etc., can help give a better picture of where to credit each lead. A reputable Seattle advertising agency will provide clients with monthly metrics reporting for all of their digital advertising along with reports of traditional placements. In our agency, we keep comprehensive records of every ad that runs and how much was invested. This allows us to hold the media companies accountable for the purchases we make, gives the advertiser a clear picture of what advertising was running during which timeframe, tracks results and allows us to optimize advertising buys to maximize the value for our clients.
6) Hold the media accountable for ad buys.
This is a big part of our service at Thrive. Many advertisers think media buyers create media plans, order them and forget them. That’s not how we work here. Our clients favorite part of the service they receive from us is the accountability portion of our management. We require the media companies to deliver what is ordered. This sounds like a simple request. One that any advertiser could do on their own. But after running this Seattle advertising agency for 10 years, we can assure you that media companies make mistakes often or even intentionally underdeliver what they promise. Holding them accountable for what you invest is a critical aspect of our job. We go through invoices line by line. We audit and require makegoods for every missed advertisement. We don’t let media reps off the hook when they try to change the offering. If you were to purchase a new car and the dealer promised you bells and whistles, then delivered you a new car without bells and whistles, you’d be a very angry customer. Our job is to ensure that the “dealer” delivers all the bells and whistles without cutting corners, changing the order, or intentionally confusing you so that they take more than they should. Media sales is like all sales. It’s a commission sales job that incentivizes employees to sell what is in the best interest of the media company. As media buyers, our job is to work for you, the advertiser, to ensure that you are getting the most value for your investment. And the best part? We don’t charge for our services. See how we are compensated here.
We hope these 6 advertising tips were helpful for your business. Our Seattle advertising agency works with businesses locally, nationally and regionally. If you have questions about how to make your advertising dollars work harder and smarter, we’d love to have a conversation about that with you. We’re skilled at creating advertising plans that work and maximize your return on investment. Contact us today, here.