Maximize Your Return on Advertising Spending

Follow some simple tips to maximize the return on your advertising spending.

Maximize Your Return on Advertising Spending

Marketing is often a major expense for small businesses. Learning how to maximize your return on advertising spending and finding ways to stretch your advertising spending are important. Before we dig into the math, let’s look at where you can place advertisements. In general, you can use:

  • Print, primarily newspapers, and magazines
  • Radio
  • Television
  • Direct mail
  • Billboards and other forms of display advertising
  • Web / social media

To decide which medium to use, put yourself in your customer’s place. Determine who your audience is, where you can find them, and what they want.

You will often use a combination of mediums to reach your target audience. For example, you may advertise in a local newspaper and local radio. If you want to attract national or global customers, web advertising is likely your best and most cost-effective choice. If you operate a hotel, a combination of web advertising and strategically located billboards might be your best option. The key is to "go to" your customers and ensure the right audience sees your message.

Testing the Market

  • Micro Advertising Campaigns - The concept of micro-advertising campaigns is to test your advertisements in a small market. These campaigns should have precise goals and performance indicators that are being monitored. An example of this campaign would be a small, targeted demographic and region on a social media channel. A short run of a micro-campaign offers helpful data before spending on a large advertising campaign.
  • Offer Testing - Experiment with different promotions and offers to determine what best motivates potential customers. BOGOs, bundling, and promotion codes are among some offers you might feature.
  • A/B Testing - Eliminate the guesswork on customer ad preference. Running two ad versions for the same campaign will identify your top-performing ad. This information will guide you in pairing your advertising with your audience’s preferences. This approach is especially helpful when you are a new business or in a new market.
  • Try Different Channels - With email, Google Ads, SEO, Social Media, and traditional options, running advertisements on different channels will reveal where your target audience is. Try pairing a few channels to find what works well together.

Potential Issues

One of the issues with measuring advertising effectiveness occurs when you run ads in multiple mediums. For example, if you currently run print and television ads, how do you know which type of ad produced additional sales? In many cases, you won’t. That may be fine as long as your total investment is paying off.

To measure true advertising effectiveness, you’ll need to find ways to track results more closely. One method is to modify your ads slightly. You could create different advertisements for different products and display those ads in different places.

For example, if you sell cookware, you might advertise a specific line or brand of products in print and another on television. While different lines may get a small "bump" in awareness – even if they are not featured in a particular advertisement – you can track the performance of specific ads more closely.

Separate Awareness from Direct Response

Some mediums work better for creating awareness. For example, you might use television ads to increase overall customer awareness and enhance your brand while using direct mail to advertise promotions or specials. If that is the case, evaluating advertising effectiveness is relatively straightforward. If you create a direct mail piece offering a 10 percent discount on specific services, you can quickly determine the ad’s impact by how many customers take advantage of the offer.

To determine effectiveness, first make sure you identify your goals. If you aren’t sure what you want your ads to achieve, how will you know if you are successful? The best ads create a customer call to action – so clearly determine your desired action. Doing so will allow you to more easily measure effectiveness and make necessary improvements to maximize your return on advertising.

References:

https://www.crowdspring.com/resources/marketing/lean-marketing-strategies-small-businesses-startups#:~:text=Create%20small%20advertising%20campaigns%20with,adapt%20for%20the%20next%20iteration.

https://www.linkedin.com/pulse/maximizing-roi-through-effective-advertising-guide-small-ahmaad-green/

https://www.ana.net/miccontent/show/id/ii-2023-05-optimize-ad-spend