I have had 15 years experience in selling advertising. I have sold Radio, yellow pages, and worked with Internet. Advertising is an interesting business; and, as the economy changes, so do advertising trends.
Cut advertising expenses first??
I was getting gas this evening and ran into a friend who owns several radio stations. I asked how the radio business was, and he said things were great. He then told me he has been in radio through 4 recessions, and it has never really effected their business. He said that this year was not as good as last year, but better than the year before; and, it was an all time record. Much of it is because of the area we live in; and if we lived on the coast or in a large metropolitan area, he would be telling a different story. He asked me how my business was.
In yellow pages, the industry as a whole is down slightly. The last book we did ended up better than the year before. We are working on a new book at this time; and, it is going OK.
Before this conversation, I spoke with a body shop owner. He said that he has been in businesses for over 40 years and that it seems to him that when the economy is bad his business is better.
I talk to business people every day; and ,I hear both sides of the story. I hear the gloom and doom; and, I hear the success stories. Yes, there are folks out there that are truly having a hard time keeping the door open; and, I know how they feel because I have been there.
The number one difference I have seen is the business owner’s attitude. The people I have personally met who are struggling are scared to death of what may happen with the economy and have chosen to start cutting everything possible. Many start with advertising. I had a salon owner tell me the other day that advertising is the thing she cuts first because it is a controlled cost. That makes sense in the checkbook; but, in the big picture it often proves to be a mistake.
Advertising during hard times is an awesome opportunity. Since there are those who are cutting, it opens the door for you to take their share of the market.
Time to Advertise
Yes, I agree you have to be careful where you put your money, but cutting advertising is a mistake.
Before you cut your advertising, ask yourself several questions.
1. In my overall budget, what is my current advertising cost?
2. Where are my advertising dollars going? Make a list of the last 3 -6 months advertising and break it down by category such as Yellow pages, radio, television, newspaper, and other. Where are the majority of your funds being spent?
3. Once you determine where your dollars are going, you need to look at how effective the ads are. EXAMPLE: If you are an at need service company, you need to consider the fact that people don’t think about your business unless they need you. 80% + turn to yellow pages at a crisis time such as this. They will not remember your phone number from an ad they heard on the radio 2 weeks ago going 70 miles per hour going down the freeway. On the other hand, if you having a slow month and you need to generate some fast income, then running a special time sensitive ad on the radio might make them react and go ahead and have the work done at a better price.
4. Re-direct your advertising dollars for maximum effectiveness. Example: If you are running television spots at
$80.00 per 60 second spot. and they are running 2 times a day 6 days a week, then you are spending $960.00 per week or $3840.00 per month. If you would like to run some specials for the last 2 weeks of the month but you can’t add the expense, then you can re-direct. If you simply did one spot per day then you have a budget of $ 1920.00 for the month to run your specials. After your special is over, you can then resume your regular schedule. This will give you a chance to evaluate the effectiveness of your ads by judging the results.
5. The last thing before cutting your advertising it to look at your entire budget and expenses and see what else is a cost that you can cut.
Remember cutting advertising is cutting your customer flow; and, cutting your customer flow is cutting your income.
If you are fearful of the economy or just want to know what is really going on, not just what you hear on the media….
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