Over the years I have pondered this saying which has been attributed to several industrialists including Sam Wanamaker and Lord Hanson, half of my advertising expenditure is wasted, the pity is I don’t know which half. This saying has influenced how I buy advertising. I don’t!
As a small business owner, one tends to be at the mercy of snake oil salesmen who claim this virtue and that wonder for the advertising outlet they represent. It is very easy to plonk one’s money on the table in the hope that the phone would ring, or these days that the response form would be filled. Big fat hope! It is almost impossible for a small business owner to advertise with any degree of success. Marketing yes! Advertising no!
Every time I have got a call from an advertising pedlar, I have responded with this proposal: I am sure you are confident of your service, unfortunately, I have no idea it would work, in fact I am almost sure it wouldn’t and it would be a waste of my money. So here is the deal, as the marginal cost of production to you is almost zero, you and I know that if this thing is successful, I would definitely want more of it hence, let me have it at zero cost for the first 6 months, if it works, everybody will be happy and I’ll sign up for the second 6 months of the year at double price, so in effect I would have paid full price for the deal.
Only one advertising house has accepted such an offer, and guess what, 6 months of adverting failed to yield a single lead.
The moral of the story is that advertising for a small business, is a mugs game, there is only one winner, and it’s not the small business.
This is where Social Media comes in. By the way, in no way is this suggested as all things to all men, but the various tools of social media afford the entrepreneur and the business owner the opportunity to engage with their potential clients on a cost effective and time efficient manner.
What are your views on Social Media and its effectiveness? Please do share with us.
This is a guest post by Ade Oduyemi, Inheritance Planning Manager at Maximum Inheritance Specialists, http://www.maximum-inheritance.co.uk .They provide wills, trusts and power of attorney for the entrepreneur.
{ 10 comments }
There are many forms of advertising, and if you are in the holiday home rental business, you’ll find that you do need to do some advertising as well as promote your business through social media channels.
However, the different media within which you carry out your advertising has changed over the years. In the 20 years I’ve been running a self-catering holiday home business, the amount of press/print advertising has been reduced to zero, whereas the on-line spend has steadily increased over the years.
Different websites offer different returns and it’s always important to check where your guests have seen your advertisement, or what link sent them to your site to book.
Social Media is proving very effective in helping the SEO for our own website, and at the moment, that, plus the opportunity to engage with guests past, present and future are the main benefits for our small business.
I love the tip of asking for 6 months free trial!
Me too !!
Thank you! Susan, for sharing your experience.
I think that it depends on your target audience, and the service you provide, as well as where you advertise all effect the outcome. For example where I used to live we got a little book of local tradeservices through our door once a month, Clients how have advertised in such books have reported better success than those who advertised in the classifieds of the local newspaper, (? less effort to get see the ad?) However the facebook page for trademen in specfic location find it harder.
Hi Abha,
I’m afraid I could not agree less with the content of the article……
Don’t shoot me yet’ll explain why.
As it is correctly reported at the beginning, there is a famous quote that goes “half of my advertising expenditure is wasted, the pity is I don’t know which half”. So, if we analyse that quote, we can say by definition that “half of the advertising DOES work”. So, if fifty per cent of my advertising expenditure does work, and that advertising brings me new, or returning or long lost clients, than -to me- that’s 100% effective as it brings me customers I would not have otherwise got.
The first key is in finding which advertising channel works best for you. And for a small-to-medium business that must involve a bit of trial and error, trying different channels (on-line, off-line, social media (remember not all social media is on-line, what about networking?), printed advertising, leafleting, e-mail advertising, or for those SMEs that can afford it, radio or tv advertising.
The second key is understanding and accepting that advertising (like social media!) takes time. I have seen this with my clients through the years: the ones that have committed their businesses to a continuous “dialogue” with their target market (and this can involve both paid-for and free advertising) are the ones that are more successful. The ones that “put their toes in here and there, then take them out again, then try in a different pond” (have I taken the analogy too far?) are destined to always be also-runs or fail.
I see the future for small to medium companies going in these two directions: localised printed advertising (very effective and very cost effective so ideal for SMEs) and social media: what a powerful combination!
Mike
PS One final thought back to the ’50% of advertising works” issue. That might be true of advertising but are we saying that other functions are always 100% productive? Are we saying that sales always deliver 100% success? Is every single sales meeting concluded with the customers signing on the dotting line? Or even, are the other functions of a company (large or small) always much more that 50% productive? My experience with businesses of all sizes tells me not. Advertising is no different. It’s part of the mix of successful companies. But it must be in the mix for the company to be successful.
Gee, that was long, did not mean to write that much – promise!!
Thanks!! Mike am glad you have taken the time to share your thoughts.
There is a lot of merit in both the original post and in the response from Mike, but I think that the original post posits a false dichotomy when it says: “Marketing yes! Advertising no!”
That seems to suggest that advertising and marketing are different creatures, whereas in fact Advertising is one small part of the Marketing Mix – the concept first popularised in the 1960s that breaks Marketing down into the Four Ps of Product, Price, Place and Promotion. If I can add a shameless plug for my own blog, I discussed it here in October last year: http://bit.ly/gOsZYI
The truth is that Advertising is a key part of the Promotion part of the Marketing Mix, as is sales, as well as special promotional tools such as BOGOF offers or discounts.
In short, I agree with the original poster that the use of Social Media might well prove more cost-effective for the small business owner than traditional advertising, but I’m with Mike when he says that not all advertising should be dismissed out of hand. Now, how do I get these splinters out my rear?
As the owner of a retail business I have invested hundreds of pounds over the last three years with minimal return. Your 6 months idea is just fantastic, you have now planted the seed for a great comeback when the ‘Ad Man’ comes calling…:D
Hi. Beverley..Do let us know the response of the ‘Ad man’…:)
{ 1 trackback }