When was the last time you went to the phone book to find a service or locate a store? Along those lines, how often do you make purchases based on print ads in newspapers or magazines?
We all used to make purchases this way, but the truth is that successful businesses are spending less and less of their advertising dollars on traditional media.
But does that mean you don’t need to advertise at all? I don’t think so, and your competition probably agrees with me. According to the Internet Advertising Bureau, companies across all sectors are spending more on advertising than ever. In the last quarter of 2015, spending hit $15 billion in the U.S. alone.
Companies are also spending more on digital advertising than ever, with a projected 12.2 percent growth in digital spending next year and a projected decrease in spending of 2.1 percent on traditional media buys. This chart from the CMO Council and Neilsen Media Research shows the trend (keep in mind that fourth-quarter spending is always higher than spending in other quarters).
Companies are Spending More on Advertising Overall
In the most recent comprehensive IAB survey, businesses also said they are spending more on advertising as a percentage of their total budgets. Here’s an industry breakdown, as of August 2015:
Marketing Spending as a Percentage of Total Company Budgets
B2B Product Sellers: 10.1 percent
B2B Services Sellers: 10 percent
B2C Product Sellers: 17.5 percent
B2C Services Sellers: 11.3 percent
7 Reasons Why Marketing Makes Sense
Many businesses wonder whether spending on advertising is worth it, and given what we know about ROI tracking for ads on most mediums, I don’t blame them. But there are many reasons why every business needs to spend on advertising, whether it is a new startup, established business, or anywhere in between.
1. The Competition is Doing It
Whether you’re just looking at statistics or doing your own market research, you’ll find out quickly that your toughest competitors are spending on marketing. But even in rare circumstances when they aren’t, you can bet they will be soon. Stay in the game by including marketing in your company budget, and then sit back and wait for revenues to grow.
2. Brand Awareness: Getting to the Close is a Long Game
Customers are far more likely to buy from brands they have heard of before, and even more likely to buy if they’ve already had at least one interaction with you. When your ads keep your brand top of mind, people will reach out to you at the moment they’re ready to buy. This kind of success can be hard to measure because it can take months, if not years, for your audience to be ready. When they are, the right ad strategy can lead them directly to your door.
3. Don’t Lose Ground: Retention Requires Novelty
If your business is doing well, you might think that you can rely on existing customers to keep that growth on track. Unfortunately, this thinking error has sent many successful companies back to square one.
It happens because people seek out novelty. Often, that might mean they try whatever new product or service they hear about it just for the sake of change. Don’t let this happen to your customer base. Instead, spend what it takes to provide that novelty yourself by rolling out interesting, compelling ad campaigns on a regular basis.
4. Revenue Growth: Boost Sales Among New & Existing Clients
A stagnating business is a failing business. That’s just the way the economy works. One way to protect yourself is by offering new products or services, and it works for both existing customers and new ones. For existing customers, you can use ads to persuade them to purchase upgrades or new products. For new clients, having a variety of offerings is a great way to start a relationship.
If your audience doesn’t know about your products and services, however, it doesn’t matter how good they are. Get the word out or you’ll never get the returns you need.
5. Targeting: You can Control Ads and Target the Right Customers
Being known is important to the success of your business now and in the future, and you can do that pretty well through social media, word of mouth and even having a great website chock-full of useful content. Budget for that, but don’t stop there. Closing deals with actual customers is what really counts. Paying for awareness by buying ads is the only way to have complete control of your message, and it’s the only way to make sure that message reaches the right people.
6. Credibility: Buying Ads Makes You Seem Successful
Human psychology is yet another reason why spending on ads makes sense. It’s not exactly logical, but it’s true: the more you advertise and the better your campaigns, the more successful people think you are. It follows that people want to spend money and work with companies they perceive to be doing well. Paid ads let you use this to your advantage.
7. Why Not? ROI Tracking is Easier than Ever
In my introduction, I talked about one of the main reasons companies don’t want to advertise: it might not work, and it’s hard to know whether it has. With modern ROI tracking on digital media, that’s all changed. Technology offers ways to prove effectiveness for each and every online marketing effort, paid or unpaid. New tracking options can also make you more effective, because you can adjust on the fly based on numbers you can trust. When you choose Online Image® for internet marketingThis broad term includes everything from content marketing to display ads, PPC (pay per click) ads, social media marketing, directory listing work and online reputation management., you can see this data at a glance.
Conclusion
Spending on traditional media such as phonebooks, radio, newspapers and TV is on the decline, but that doesn’t mean you should cut advertising out of your budget. Regardless of your growth stage as a company, ads can help you get new customers and get existing customers to buy more. Not advertising could mean stagnation and loss of even the most loyal customers. With ROI tracking and digital media, you can ensure that every marketing dollar you spend will build your bottom line.