Advertising campaigns are quite tricky to deal with as it is a combination of creative and financial tasks. It not only requires a creative team to think about unique ideas to execute, but also for the finance department to arrange for necessary resources. Both departments carry out their responsibilities simultaneously and efficiently by co-ordinating with one another. However, as an owner of an advertising company, you need to be aware about certain facts related to budgets for the campaign. Some of the questions are discussed below:
How much to invest in advertising?
The precise figure to spend on advertising is calculated based on the sales revenue. This means that the cost of advertising is determined by sales. If you aim to boost your sales, then you are likely to invest more in your advertising campaign. Most entrepreneurs pick either of the two options mentioned below:
A specific percentage of the project is sealed for advertising based on the projected sales revenue. For example, if you invest 5 percent of revenue and plan to bring £100,000 in sales then you must spend approximately £5,000 in advertising.
If selling price of a product is £10 and its advertising costs up to £300 then you should be willing to spend £3,000 for a sale of 300 units approximately.
The trick is that once you need the secret to manage money then you can plan a budget according to your business needs. At times, advertising campaigns vary due to budget constraints and limited resources. During such situations, concerned managers should be wise enough to search for alternative finance options that can help the campaign run without any huge hurdles. There are some companies which offer flexible repayment options and make the process convenient for business owners.
Advertising Negotiations and Discounts
Irrespective of what media you choose or strategy you apply, the advertisers you choose there are always tricks where owners can make the campaign work effectively. All they need is good negotiation skills coupled with some discounts which can maximise campaign profitability.
Some instances are discussed below:
o Per Inquiry deals- TV, magazines and radio at times only charge advertisers for the ads if and only if there is a potential sale or relatable response.
o Mail Order Discounts- There are specific discount rates for businesses if they use mail order advertising.
o Frequency Discounts- Some media houses offer lower rates if the advertisers commit to specific number of advertising with them.
o Barter-There are companies who offer services and products in exchange of reduced advertising rates.
o Spread Discounts- There is some magazines which offer reduced rates to advertisers if they regularly purchase huge advertising space preferably 2-3 pages.
o Seasonal Discounts- There is some media houses which reduce prices during certain period of the year.
o In-house Agency- If an advertising agency has its own media house they offer space at lower rates.
Small businesses must search for advertising medium which are cost-effective to gain better sales and revenue. The key to this is look for a medium that helps you to reach your potential cost at minimum cost and clearly indicates your message to them.
An advertiser must evaluate market scenario constantly to keep tab on varied advertising rates available to them. There are instances where media houses have low rates and are ready to negotiate on them too.
Once you have decided a specific budget for your campaign the next step is to determine how you are going to utilise the financial resource optimally. There is a pool of options available to you like print-Newspaper, magazine, TV, radio (30 sec or 60 sec ads, infomercials) and also digital platform.
How to select a media:
The cost, product/service and consumer are the three pillars based on which you can decide a particular medium for advertising. Business objectives, availability, coverage, etc. are secondary factors which you must consider for an appropriate media option.
Determining Scheduling Criteria
The duration and timing of advertisements are two factors in driving the campaign successful. There are three fundamental techniques which are frequently used by advertisers for scheduling an advertisement. All three of them are discussed here:
Massed – This type of advertising is done only once for special occasion or once in entire product life cycle. For example, advertising a product on every Christmas or Halloween.
Flighting – When advertising is high during peak period and low during off season then it is called as flighting scheduling. This method is also known as pulse technique. For example, cold drink ads run all through the year but the number of ads during a day increases during summer.
Continuity – When an advertisement is advertised once in every month or on a specific date/day, then it is known as continuity scheduling. This can be done for products which are used all year round. For example, you might have noticed grocery sale ads within the first 15 days of the month.