If you don’t do your homework then yes, advertising can simply be a form of speculation. If you are just throwing money at an advertising opportunity but you have no firm evidence to suggest it will bring you a return, but hoping for some effect, you are taking a big risk.
If you are an SME and look at advertising as simply a form of speculation then no one can blame you from guarding your spending closely. However, you can change your approach by adopting one simple principle – if you can’t measure its impact, then don’t pay for it.
But if you can measure it then it is worth considering. If you want to grow your business, at some point you will need to advertise so do your planning and research and allocate budget to invest in advertising opportunities that are most likely to bring you new customers. It has been claimed by the Advertising Association that for every £1 an SME spends on advertising they are getting a £2 return in sales.
With the vast number of businesses and brands vying for our attention every minute of the day in seemingly every space that can carry an advertisement it is no wonder that SMEs shy away from advertising. The costs of trying to penetrate consumer consciousness battling against big brands’ budgets with the use of traditional advertising formats and vehicles is largely prohibitive for small and start up businesses.
However, that doesn’t mean that SMEs shouldn’t advertise. It means that when they choose to do so they need to research their advertising options in great detail and look for targeted options which can reach a concentration of their customers. Advertising strategies should be well planned and measurable. It may be necessary to take calculated risks but as long as they can be monitored, to learn from the outcomes, then the effort won’t be entirely wasted – at least future campaigns will be better informed.
When you are managing tight budgets as an SME it can be difficult to justify large amounts being spent on something with no immediate return, so you might find yourself stuck between a rock and a hard place of needing more customers to increase revenue, but not having the revenue to win them in the first place.
With the announcement of the government’s Growth Vouchers scheme SMEs no longer need to grapple with such dilemmas on their own. With the funding available SMEs can engage the services of experts who can advise on those difficult business decisions.
Luckily in the modern world of advertising money isn’t everything. Fortunately SMEs can now take advantage of many free vehicles for advertising with the growth of social media platforms. The skill in the use of these formats is to research customers’ use of social media and build your own online presence, engaging with the right communities as a trusted and relevant contact.
Many businesses are flourishing as a result of their online and social media presence and understand the importance of social networking. With their successes in this field they will certainly generate budgets that can move them on to print, outdoor and other forms of paid-for advertising to make optimum use of the marketing mix.