There is no silver bullet when it comes to marketing and advertising. If it were that simple, every business would be booming with growth.
While I was at PepsiCo, I worked on a project to try to answer this question. We tried to determine exactly how many dollars of revenue we were generating with each dollar we spent on advertising. We worked with a cutting-edge firm, and poured millions of dollars into this endeavor. The firm we worked with ran complex regressions, looking at our pricing, competitive pricing, in store merchandising, new product launches, all of our advertising channels, and much more. What we found, is that the answer they came back with required a lot of assumptions before we could get results that made sense. And therefore, our results were only as good as our assumptions.
The challenge with measuring advertising is that people don’t make linear decisions. Every purchase decision has a strong emotional component, where people have to “feel” good about their choice. It’s very hard to measure feelings like this. Good advertising connects with prospective customers both rationally and emotionally. The old saying goes, “People won’t always remember what you say, but they’ll remember how you made them feel.” This also applies to your brand.
Even with good advertising, there are a lot of other factors that go into a purchase decision. After all, people rarely walk into a car dealership and say, “I’m here because I saw your TV ad last night!” Yet carmakers spend hundreds of millions of dollars a year on TV ads. This is because the TV ads are another moment of influence towards purchase, but not a silver bullet. Some factors that determine how effective your advertising would be might include: How much demand is there for your product? How much competition are you facing? How does your value proposition compare to those competitors? Do you offer a good value for your price? What’s going on in the economy? What is a normal purchase cycle? How effective is your team when you get a call or inquiry? What are your reviews? And many, many more.
We’ve had clients tell us, “You’ve helped us really grow our business,” and we’ve had clients tell us, “I see all the activity, but I’m not getting new leads.” The truth is that both of these assessments are wrong. We can control the quality of your ad. We can control how efficiently and effectively we place your ad. What happens after that is out of our control. When Sophos Marketing is layered into a multi-channel strategy, with a product or service that is relevant for your market, then you have the greatest chance of maximizing your ROI. Remember, a consumer needs to see you an average of 7 times before acting. If you are only relying on one marketing channel to do this, it’s going to be difficult to get to 7.
The decision to invest in advertising is a business decision. If you have an advantaged product or service that customers want, then getting the word out there with advertising can really help you grow. If you are still unsure, maybe you start with a limited budget for your advertising until you reach a point where you are more confident on what will happen when you ramp up your investment. There’s no right answer, and it’s very easy to spend too much money too fast. This is why our pricing starts at $299/month. We truly want to be able to help every business out there, and $299/month lets many businesses dip their tow in the water for limited financial risk. You can always go up from there when you’re able to assess how your marketing investment might impact your business.