How effective are your advertising dollars?
Perhaps the more important question to be asked is, what are your customers viewing, or listening, or reading—if they are reading—and in what form or on what device?
If you are a business that is trying to decide where to spend your advertising dollars, the choices are almost overwhelming. In addition to the traditional media of the past (the daily newspaper, network television, radio, direct mail, and billboards), advertisers are faced with a gauntlet of digital choices.
Despite the multitude of choices, advertising rates have continued to escalate, leaving budget makers with difficult advertising placement decisions.
However, even with increased advertising costs, many traditional media outlets are also feeling the effects of a widening and diverse number of advertising platforms.
According to the National Association of Broadcasters (NAB)—Google, YouTube, Facebook, Pandora, and other online companies are capturing a significant share of advertising dollars that used to be spent in the local market. In addition, some digital channels, such as Facebook, advertising rates change according to the type of industry and the number of advertisers at any particular time.
In October, the NAB made a plea to the Federal Communications Commission (FCC) to lift the cap on the number of broadcast stations a company could own in smaller markets (those under the top 50). The reason being is that radio stations, despite increased ratings and listening times, have reported losing money, upwards to $100,000 per station.
In addition to radio, local television stations along with newspapers, magazines, and cable companies have also been reporting decreased revenues since the recession.
Using Las Vegas as an example, back in 1975 Clark County’s population was 250,000, and there were 13 radio stations, four television stations, two newspapers, along with a scattering of billboards. Nearly every household subscribed to at least one newspaper, if not both, even if they thought the only value was lining the birdcage
Today, with a population of over 2 million, Las Vegas is ranked the 30th radio market in the U.S. with 76 radio stations can be heard in the metropolitan area. More than half of those stations have three digital channels broadcasting separate programming, and six major broadcast corporations control thirty of those radio stations. While radio continues to hold listeners attention and loyalty more than any other media, they are broken into smaller niche segments that correlate with the format of the station. To be effective with a radio advertising campaign, you must target the type of customer you wish to attract and pick a genre that appeals to that customer, then advertise across several stations that play to that audience. Or, if your customers are diverse, pick the top three stations in several genres and (e.g., pop, country, hip-hop, etc.).
On the TV side, Las Vegas is ranked the 42nd TV market in the U.S. with 22 over-the-air analog channels and another 20 digital channels that can be viewed with an outside digital antenna. For television advertising, it is all about picking the right program such as local news. Or doing a saturation plan with the most commercials for the least amount of money per play.
Cable companies are also feeling the pinch. In 2014, over 125,700 subscribers across the U.S. cut their cable cord in favor of Hulu, Amazon Prime, Netflix, Sling TV, and YouTube. In 2015, the cord cutting number was another 383,400 subscribers. In 2016 the industry reported nearly 800,000 cutters, and in 2017 almost 1,495,000 customers cut their cable. The number of cord-cutters is projected to grow to over 19 million by 2019.
Where there used to be two significant newspapers, there is now one, the Las Vegas Review-Journal, with a daily insert from the Las Vegas Sun.
As of 2016, Las Vegas Review-Journal Nevada’s largest newspaper had a circulation of 167,000 daily readers, 184,000 on Sunday. In July of 2017 that number had dropped to about 80,000 daily subscribers, 120,000 on Sunday. About 6.6 percent of those subscribers receive an online version as opposed to a printed copy.
In addition to electronic media, mailboxes are being overloaded with direct mail flyers, which more than likely don’t make it past the recycle bin in the garage.
To counter the revenue losses, newspapers, radio and TV stations, and cable companies are all trying to compete for your attention in the digital world and packaging their traditional media with digital advertising options. Each time you Google, Bing, or Yahoo, a plethora of pop up ads appear in your search results. And, if you search for a specific consumer item, advertisements for that item will automatically appear next to articles that you read online.
However, digital advertising is only effective if people are viewing the digital advertisement. Many times, when an ad pops up on the computer, tablet, or smartphone screen, people immediately look for that little X in the upper right-hand corner to get rid of the annoyance, without even knowing what the ad is promoting.
According to a November 17 CNBC article newspapers and magazines are expanding their online presence with a new business model. Instead of providing free articles, paid for by advertising, they are establishing pay-walls that require online readers to pay for a subscription after two or three free stories. While they are effectively creating a base of committed subscribers, they are also restricting the number of people who can view their content and the advertising contained therein.
As a business person with all of these outlets vying for your advertising dollars, how do you choose where you spend your money?
Here is some key advice to help you plan how you spend your advertising dollars.
- Know your customer – Radio and television stations are rated by Nielsen, and it is easy to pinpoint the demographics of listeners and viewers by age groups, gender, and race. Most publications will cater to a certain type of audience (business, sports, fashion, or whatever is hip at the time). Chose the media outlet that caters to the type of customer that fits your product or service.
- One and done doesn’t work – To have an effective advertising campaign, you need to be consistent. The key is repeat impressions. This does not mean that you have to be in the viewer’s or listener’s face every other commercial or page. Spacing your advertisements strategically throughout different day parts and different reading sections and repeating your advertisements throughout several months is very effective.
- Build a brand – Budweiser is the “King of Beers,” Coke is “The real thing,” and Abby Dental is the place to go for low-cost dental work with the “Price Match Guarantee.” Your logo with a memorable slogan can build a brand. How many of you know the slogan for the law firm of Glenn Learner and perhaps repeat his phone number?
- Use exciting graphics – People are visual, plain text on a plain background is boring. As the expression goes, a picture is worth 1,000 words.
- Talk about benefits – Explaining the features of your products or services is important, but explaining the benefits for the customer is what it’s really all about. After all, people are more interested in what they get from your services than what you do.
- Call to Action – Don’t just tell your potential customers about what your company has to offer. Encourage them to take action. Tell them directly to click on your ad, order your product, pay for your service, etc.
- Measure your success – It is impossible to know how effective your advertising campaign is if you don’t gauge the response. The number one job of the person answering your phone or interacting with customers is to find out how they heard about your business. As a business owner, you should receive a weekly report on all new customers and how they heard about your business.
- And most important of all, deliver what you promise. It is much cheaper to keep a client than it is to prospect for new clients.
Your Partner in Success