"Half the money spent on advertising is wasted; the trouble is I don't know which half." John Wanabaker, US Department Store Merchant (1828 - 1922) I frequently use this quote when I am asked what I do for a living as part of my elevator speech. You know, the speech where you have less than thirty seconds to make a quick impression about who you are. However, I've changed it up a bit for dramatic effect. Mine goes something like this:
"Did you know half the money spent on advertising is wasted? Would you like to learn which half?" This quote does tend to grab people's attention, especially business owners. And why not? After all, in today's marketplace a majority of business owners are doing it all. In addition to handling payroll, managing inventory and unclogging the toilet, they are the marketing/advertising directors of their business. Such is the reality of business commerce around the world. But are business owners truly qualified to be marketing directors in charge of advertising budgets, creative strategies, managing the image of their business, etc.? Of course they are. Why not? They bleed and sweat their business. Who is better qualified than, "they" to know how to better reach their customers?
Unfortunately, the long-held belief that 50 percent of businesses fail in the first year and 95 percent fail within five years is a statistic that argues otherwise. The fact of the matter is that most new business owners do not understand marketing and advertising. Advertising and marketing is not the same as it was in the good old days. Today you have to contend with more than just the traditional mediums like radio, newspaper, and network TV.
Today, more people are spending time reading the newspaper (and news in general) on the internet than actually reading a physical newspaper. More people keep up with each other using social media like Twitter and Facebook than writing letters or talking on the phone. More people have escaped network TV to watch original dramas, reality shows, and comedies on cable TV. These are some small examples of how the dynamics of advertising have changed just in the last five years! So you ask, "which half of the money spent on advertising is wasted"?
Before I answer, "which half", please understand this column is not a, "one size fits all" advice column on advertising. What I write here may or may not help your business succeed. If you are looking for advice on helping your business succeed in the marketing and advertising world, please start with hiring a qualified "Marketing Director." Please don't make it be your business manager or receptionist, who are equally as busy dealing with the company business. If you can't afford a full-time Marketing Director consider hiring a qualified Advertising Agency to help guide you with your advertising. Having said that, here is my broad theory on why and which advertising doesn't work.
1) Inability to clearly identify Target Demographic. Businesses must set their sights on identifying who their customers are. They cannot rely on the "shotgun theory" that says trying to reach everybody or anybody with your advertising is effective. Who is the customer? Is it a 35 year-old female with two kids, who works full time? Or is it a 50 year-old male who drives pick-up trucks? Identifying who their Target Demographic is will allow a business to better target their advertising, and ultimately, help reach their business goals.
2) One size fits all advertising mentality. Just because one advertising medium worked for one business does not mean it will work for your business. See item number 1.
3) Not having a budget for advertising. This is the most common response I hear from start-up businesses. Most start with a budget, but it is cut to make room for other expenses. When they room for the budget it is too small and is completely wasted. Advertising is not an expense, it is an investment, and essential to the success of the business.
4) Employees not trained. How many times have you walked into a store and asked for a sale item and an employee has no clue what you are talking about? This problem is more common than you might think. Employees must be made aware of what advertising campaigns the business is running. It is vital for employees to be aware in order to make the sale for the business.
5) Bad creative. How many times have you seen an ad and asked yourself, "What was that about?" Too often businesses try to duplicate national advertising campaigns with bad creative (done on the cheap) that miss the message of the campaign. Creative is too important to the selling of a product. Do not leave it to chance. Hire professionals who understand your business and who can develop smart creative.
The following are other reasons half of the money spent on advertising is wasted. Most are self-explanatory:
Campaign did not run. Bad day-part rotation. Product not in stock. Too reliant on traditional media. Too reliant on new media. Ad campaign too ahead of its time. Ad campaign too behind the time. Campaign did not run according to schedule. I often hear business owners say, "You have to try everything until you find something that works." That mentality is expensive and proven to either not work or impede growth of a business. The key to learning which half of advertising isn't working starts with a business owner and/or manager having the willingness to ask and learn.
Your business is your baby. If your baby is sick you have the choice of trying every remedy around the house or you can take the baby straight to the doctor. In the same way, if your business is sick with regards to advertising and marketing you must take it to someone who can help. Who can help? Look around and find a business that is successful with their marketing and ask for their advice. Visit your local chamber of commerce. Search online for newsgroups that relate to your business. Hire a marketing/advertising director. Work with a qualified advertising agency. The help is there. You just have to look and ask for it.
So, is half the money spent on advertising wasted? Truth be told it the number could be higher.
Edmundo Resendez
