Promoting your way to the poorhouse
By Andrew Shedden
We all know advertising makes the business world go round. Advertising fuels desire, generates demand, makes the blind see and the lame walk. It seems advertising does everything it’s supposed to do, except produce profits.
If you’re like most of our clients you’re probably noticing that you’re spending more and more on your advertising and seeing less and less in the way of results.
The price of advertising in all relevant media continues to rise with predictable regularity and the true cost to business in wasted money continues apace.
Many of our clients tell us that over the last few years they have felt their advertising expenditure is the equivalent of burning money. The sad part is that for the most part they are right.
The biggest lie in advertising
Fabulous fortunes have been made as a result of advertising. Unfortunately much of this revenue has gone to agencies, advertising sales representatives, and the publications they push.
Entire advertising empires have been built on the back of the biggest lie in advertising. That lie is simply that “You can’t really measure advertising.” This belief has been around for a long time and has cost businesses untold millions.
John Wannamaker, a Philadelphia merchant in the early 1900’s, once said, "I know that half of my advertising does not work. I just don't know which half it is.”
Well old Johnny could have saved a ton of money if he’d demanded more measurable results from his advertising. The sad part is many modern business owners continue to hold this false and expensive belief.
The classical view of advertising
The classical view of advertising is that its purpose is to inform, persuade, and remind. Initially your advertising is to inform the marketplace that you exist. Once you are somewhat of a known commodity the focus of your advertising should persuade your prospects that your company is the best choice. Lastly, your advertising needs to remind the marketplace that you are still in business.
How the advertising industry views advertising
Advertising agencies derive much of their revenue from selling advertising space in various media. They traditionally take a 15% commission on all of the advertising space sold by their company, therefore the more space they sell the more money they make. Traditionally, agencies offer no performance guarantee. Interestingly, the vast majority of advertising agencies don’t advertise.
Advertising representatives make their living selling advertising space. If they sell you bigger ads or more of them they make more money. Their compensation is not based on how well their advertising performs. They do not have to pay the bill for ineffective advertising, you do.
Both agencies and representatives will tell you how important it is to:
Get your name out into the marketplace
Build your brand through advertising
Put together stunningly creative (and expensive) ads
Realize that you can’t really measure the effectiveness of your ads
Stuff and nonsense, I say. The only measurable results produced by the vast majority of this kind of this ego based institutional advertising is to the bottom line of the agency, advertising salesperson, and the publication in question.
The real purpose of advertising
If you happen to be the advertiser the purpose of advertising should be to generate sales leads and ultimately sales. That’s it, full stop. There is no other reason to advertise. If you spend $1 on an advertisement you better be getting at least $1.01 back. As in any other area in business it is nonsensical and inexcusable to lose money on your advertising.
Why your advertising isn’t working
The entire field of advertising is undergoing a tremendous change and if you aren’t adjusting your advertising techniques accordingly you are wasting money. The old days of throwing together an advertisement that makes a statement and running it in your local paper are long past.
There are several reasons why your advertising is becoming less and less effective. Some of the biggest reasons are:
We are overcommunicated and your promotional messages are being tuned out
New media is adding more confusion to an already crowded marketplace
Too many businesses are saying the same thing and thus are indistinguishable
Your advertising messages may not be motivational
Does this mean all advertising is a waste of money?
Absolutely not, it does mean, however you should look closely at all of your advertising activities. Every other aspect of your business is cost justified and advertising should be no exception. You must rigorously and accurately assess every advertisement you are running and cancel every ad that isn’t measurably profitable.
What you need to do to make your advertising pay
Refuse to accept the lie that advertising can’t be measured
Key and measure every single ad in every publication
If any ad isn’t making a measurable profit change it or cancel it
Promote benefits not features in your advertising
Focus on telling a compelling story centred on the needs of your market
Don’t create or accept vague artsy type ads that say nothing and sell nothing
Don’t advertise processes - advertise results
Don’t advertise your product promote free information in a paper/report etc.
Eliminate all institutional advertising and use two step advertising
Consider the value of press releases
