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Entrepreneurs

Advertising R.O.I.
By Tom Irmen

Although it’s a belief I’ve long held, I’ve shared it with very few small business owners.

Well, here it is.

I genuinely believe that most advertising dollars spent by small businesses are wasted. I’m not suggesting that different advertising platforms where money is spent are ineffective, but rather that they are often used in a manner that fails to optimize their full potential.

Small business owners need to view advertising expenditures as investments and not expenses. Doing so would encourage them to develop a more comprehensive marketing strategy as opposed to the often hit-or-miss method of advertising that the majority of small business owners employ today. Consider this. Would you continue to place money into an investment paying 1% if, everything being equal, an alternative investment paid 10%? That seems simple enough. So why do most small business owners ignore key fundamentals when deciding where to invest their hard earned advertising dollars?

So how should you begin?

First, refine your message. What are four or five characteristics of you and your business that define you and differentiate your business from your competitors? Prioritize them, and then introduce them to your existing and potential customers one at a time, consecutively, over a predetermined period of time. Resist telling your life’s story all at once. That’s what autobiographies are for.

Second, avoid selecting an advertising platform merely because your competitor uses it. How do you know it works for your competitor anyway?

Third, define your demographics. Who are your customers and where do they reside? What is the most efficient and cost-effective method of targeting them? Newspapers can reach large numbers of homes, but their news format dramatically shortens their shelf-life, requiring that you advertise more frequently. Radio can be inexpensive, but may not provide the desired return on your investment dollar if your target listener is not listening at the times your ad runs.

Fourth, don’t assume that your advertising Account Executive (A/E) is a marketing expert. The truth is, most A/E’s have little or no marketing expertise. If your A/E does not show an interest in your small business by asking in-depth questions, and helping you to craft a well thought-out marketing strategy, move on.

Fifth, get it in writing! Many A/E’s and the companies they represent grossly exaggerate, say in the print marketplace, their “real” distribution. The stated quantity printed is not an accurate measure of distribution and should not be relied upon. It does not guarantee that this is the actual quantity printed and further ignores the number of publications remaining in distribution racks at the end of each month which are disposed of.


Require that all print A/E’s verify their print quantity and mailing claims in writing every month. In fact, you should incorporate that requirement into your advertising agreement. Specify that their printer verify the print quantity on the printer’s letterhead and request authenticated postage receipts monthly.

Your small business can achieve very good results and more than a satisfactory return of its advertising investment when you:

• Define your objective
• Differentiate your small business
• Define your target demographics
• Craft a well thought-out marketing strategy
• Select the most efficient and cost-effective advertising platforms available
• Be consistent and persistent

If you’re feeling overwhelmed, you’re not alone. But, a well-trained and experienced advertising A/E can help you to achieve your objectives, and can be trusted to inform you when their advertising platform is not your best choice. Make a commitment today to get your marketing and advertising objectives on track for 2011 and discover the return on your advertising dollars that will set your small business apart from the competition in the future.

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