Advertising formats
Some successful new enterprises have been
based almost solely upon unique advertising
formats. One that deserves special mention is
the Four-Day Tire Stores that have proliferated
in the West in the last 15 years. The venture was
undertaken by an advertising agency that
sought to capitalize upon its skills. Its strategy
recognized that advertising acumen was critical
in the retailing of automobile tires. Tires are a
commodity. Every car owner buys them. There
is no question about the demand for them.
The agency developed a unique format
using large amounts of newspaper space that
contained a tremendous amount of information
about tires, along with the prices of every tire
carried in stock. It judged the market well.
Potential tire buyers want to know prices and
alternatives. They are frightened by the hidden
quality of the product. They don’t know which
tire they should buy, and they want some
assurance that the people they are about to buy
from do know something. This advertisingbased
enterprise has been very successful.
If entrepreneurs feel that advertising is
critical to the success of their ventures, then
they should consider beginning in markets
where advertising costs are low. For example, a
group of people were planning on instituting a
series of seminars nationwide, using television
advertising as their promotional tool. The first
seminar was targeted for Santa Barbara, Calif.,
even though Los Angeles would have been a far
more attractive market. However, the cost of
advertising in Los Angeles would have been a
minimum of $500,000, whereas the initial cost of
advertising the seminars in the Santa Barbara
television market was $20,000. The group had
the $20,000 but not the $500,000.
If advertising is important to a venture, then
it should develop a sequential market
penetration it can afford. This strategy also has
the tremendous advantage of allowing a
venture to perfect advertising skills in smaller
markets and for less money than if it were
promoting in more expensive markets. Early on,
a firm will make mistakes: its messages will not
be quite right, the artwork will be off. It will not
know when and where to advertise or what
appeals are effective, but it will learn with
experience. When a venture enters the
expensive market, it wants to be a professional
and have a campaign that has been tested to
meet its market.
Lower-cost media
Entrepreneurial businesses are heavy users of
direct mail, throwaway sheets, stuffers, and
neighborhood printed media because of their
low cost per meaningful contact. Many owners
with small budgets to spend on advertising use
what is currently called “guerrilla marketing”
tactics. They bootstrap their efforts by using one
or more lower-cost media to promote their
products to target markets.
n Fliers and handbills
n Coupons
n Fax marketing
n E-mail marketing
n Web site marketing
n Postcards
n Signs
n Yellow Pages
Fliers and handbills
Fliers and handbills can be inexpensive, yet
effective, when done properly. They must
quickly tell potential customers something they
want to learn.
Fliers cost just pennies to produce, can be
read quickly, give more flexibility, and keep a
sales message alive. They have many different
applications, such as informing, explaining new
information, and selling. Fliers can be used to
supplement other sales literature or catalogs.
Fliers are most effective when announcing a
sale or a special offer, or augmenting an existing
promotion. Most fliers are 8 1/2 by 11 inches
printed one color on one side. But there are many
varieties, for example, making a standard mini
brochure by printing on both sides and folding
the sheet in half. Another variation is using a
4-by-9-inch flier that fits into a standard business
envelope. This size is effective when put into
standard display racks, placed on counters, or
used as a mailing stuffer or insert.
Color can be added by printing on colored
paper or by using colored ink. For a stronger
visual impact, pictures, graphics, or clip art are
included.
The format of a flier isn’t as important as
the content and its appearance. The message
should be kept simple, make a timely offer, and
tie in with other promotional materials.
Highlighting the most important benefit of the
special offer with an attention-getting headline
will catch the reader’s eye. The message should
be believable and catchy and should ignite the
impulse to buy.
The sales message should sound like a oneto-
one conversation with the reader and include
all information the reader needs to make a
buying decision. The sales message can be
personalized by handwriting a note to the
recipient. Information should include the
business’s full address, directions for getting
there, telephone and fax number (with area
code), web address, credit cards accepted, and
hours of business.
A good, creative printer can assist in
designing a flier, often at no additional charge.
Or the entrepreneur can work with a graphic
designer.
There are several ways to distribute fliers,
including giving them out at the business or to
other business owners. Businesses can make a
trade deal to distribute each others’ fliers. Fliers
can also be used as bag stuffers, self mailers, or
business-mail inserts in someone else’s
mailings. They can be handed out in shopping
centers, at sporting events, at trade shows, or on
street corners, as well as slipped under doors,
placed on windshields, or placed in sales racks
or on counter displays.
It is a good idea to keep track of which
distribution methods bring in the most sales by
asking customers where they heard about the
offer. Satisfied customers can pass fliers on to
their friends and neighbors.
If prepared and distributed properly, fliers
can be an effective but inexpensive sales tool.
Coupons
Today, many entrepreneurs are using coupons.
More than 3 billion coupons are distributed
annually, even though less than 3 percent are
redeemed, indicating that many consumers
don’t clip or use them.
However, a marketing study found that the
critical factor in the effectiveness of coupons
was not whether they were redeemed but
whether they were seen by potential customers.
People who do not clip or redeem coupons may
still make a mental note of the item and later
purchase the product or service. Even when
coupons are clipped, the customer often forgets
to take them to the store but purchases the item
anyway.
Coupons raise awareness of a product even
after they have expired. Many business owners
redeem expired coupons to create goodwill and
accommodate their customers. Others honor the
terms of the offer without the actual coupon in
hand.
Coupons can be distributed through various
print media, in a direct-mail packet, a postcard
pack, or a retail location. A store can also print
coupons on cash register receipts. It can contact
other store owners whose products might be
complementary to use their receipts, always
offering to trade or barter when using other
merchants’ store receipts. A business shouldn’t
forget to use the back of its own receipts for
coupons. The main advantage of advertising on
THE BUSINESS MENTOR — Advertising formats 3
store receipts is the ability to hit a specific
audience—people who are currently customers.
Coupons can also be included in invoices,
statements, or other outgoing mail.
Another initiative is to team up with a
noncompetitive business on a special
promotion. Giving coupons to other businesses
can be an added bonus for their customers. The
key is to find a business whose goods appeal to
a specific target market. Or reward good
customers or those who send referral business
by giving them a special coupon.
Coupons are also a great way to build a
mailing list by asking recipients to fill out their
addresses and collecting other specific
demographic information. Markets can be
segmented into specific areas and a composite
of best customers can be developed. The
amount of business coming from repeat sales
can also be charted.
It is important to experiment with different
ways of using coupons to determine what
works best. Coupons should always be coded to
track the most effective ones.
Patience is the key. As with other advertising,
a potential customer needs to see a coupon
several times before taking action. A coupon
often motivates a prospect to come to a store.
This provides an opportunity to explain other
products and services that are offered. A business
owner becomes better acquainted with the
customers. Coupons are usually cheaper than
most other forms of advertising, and they don’t
need to be redesigned often.
Fax marketing
Fax marketing, if done right, is a good directmarketing
tool, as more businesses are
encouraged to place their orders through fax or
toll free numbers. Some experts predict that faxmachine
technology is the wave of the future,
ultimately changing the direct-marketing game
and the catalog industry.
Today, businesspeople don’t always have
time to read marketing information, make an
order, write a check, and send it by mail. Fax
ordering accommodates the needs of today’s
customers.
However, unsolicited fax advertising should
not be sent until a business relationship is first
established with a client. It’s a good idea to ask
permission to fax special messages with
upcoming specials, new products, or other
helpful information.
Fax can be used when speed is important to
get out a message fast. One of the advantages of
using the fax to market goods is its cost
efficiency. The cost of faxing is small compared
to postage rates, printing costs, and handling
charges. Also, confirmation that the party has
received the fax is immediate.
A disadvantage of using fax marketing is
that, if a nonpersonalized fax message is used,
some may consider it junk mail, which can
create customer ill will.
Some tips for using fax marketing:
n Send the message to a specific person
instead of addressing it to “manager of
purchasing” or “marketing vice president.”
n Make a strong case explaining why the
message has been faxed, such as a limitedtime
offer that can’t wait to be sent by
regular mail.
n Make sure to include an attention-grabbing
cover sheet that emphasizes the importance
and timeliness of the fax message.
Communicating this type of message is
effective in fax marketing.
It is a good idea to pretest the fax design,
and track the response rate before sending it to
multiple customers. The order form should be
carefully designed and small type avoided. If it
does not bring in the number of responses
anticipated, it should be redesigned. In
addition, the fax must be checked for clarity to
determine if it is readable on lesser-quality fax
machines, which some customers may have.
The idea behind fax marketing centers
around the concept that less is better. People are
inundated with information and have time only
to glance at some of their correspondence.
To gain further insight into fax marketing,
obtain a review copy of Marketing With
Technology News by calling (212) 222-1713
(www.mwt.com). It’s a monthly newsletter
featuring fax broadcasting, fax on-demand,
videotext, cellular communication, and the
latest information on marketing technology,
including a marketer’s resource catalog.
THE BUSINESS MENTOR — Advertising formats 4
E-mail marketing
Using e-mail to communicate with customers,
suppliers, employees, and colleagues is a good
marketing and communication tool because of
its speed, lower costs, efficiency, and increased
ability to network. Not only does it save money,
but it also provides an extra benefit to
customers. The U.S. Postal Service estimates
that since 1990, about 30 percent of potential
first-class mail was sent by either fax or e-mail.
There are several advantages to using
e-mail. First, delivery is faster than most other
alternatives. It takes only seconds or minutes for
e-mail to travel around the world, broadening
the market area. Postal mail is now being called
“snail mail.”
One of the main features of using e-mail is
its low cost. E-mail is the least expensive way to
connect electronically with customers,
suppliers, lenders, and others. There is no extra
charge for each message sent, unlike phone calls
or mail. No long-distance charges are incurred
as with using the fax. It takes a little extra work
to send an e-mail message to thousands of
customers. And a fancy computer is not needed
to use e-mail.
Another advantage is that e-mail is efficient
and easy to use while increasing productivity.
Documents can be transferred quickly into a
word processor or database rather than being
rekeyed.
More importantly, e-mail allows a person to
think about what, how, and when to answer
versus responding with the first thought that
comes to mind. Also, job quotes can be rapidly
returned when bids are submitted. People
usually read their e-mail messages soon after
they arrive as opposed to mailed
correspondence, which can stack up for days.
One of the main advantages for
entrepreneurs is directly communicating with
customers. They can gain more insight into
what customers want, and they can determine
how to better fill customers’ needs.
Some companies put their e-mail addresses
on their hangtags or other types of advertising.
Customer newsletters can show up within
minutes of being sent electronically. E-mail
increases customer interaction as well as
frequency of contact. Companies can rapidly
return job quotes and can increase payment
time if they provide an electronic bill-payment
service. With e-mail, it’s possible to do business
internationally without leaving home. As U.S.
markets become saturated, world markets can
be tapped instantaneously.
However, there are important disadvantages
to consider. Security can be a serious problem.
E-mail is truly a public network compared to
confidential correspondence. Other people have
access to and can read mail. Caution: Avoid
putting any confidential information on the
Internet or in e-mail. Secondly, if a computer or
network link goes down, it could take several
days to reach the intended address.
Overall, e-mail is easy to use, inexpensive,
and interactive, and it has a great degree of
geographic independence. When assessing
various electronic communication tools,
consider the importance of immediacy, costs,
and confidentiality.
Web site marketing
Expanding beyond e-mail marketing into a web
site or Internet presence for the business can be
a challenge for any business. Many businesses
have online catalogs or databases, where
customers can order merchandise. Some
businesses concentrating on traditional sales
augment their traditional marketing efforts with
a web site available to customers at all times.
Most Internet users are searching for
information about products and services they
need, although e-commerce is growing steadily.
Whether the business requires a full-fledged
e-commerce system, or it plans only to post
useful information for traditional customers,
establishing an Internet presence can be an
expensive and difficult process, and the
entrepreneur should proceed with caution.
THE BUSINESS MENTOR — Advertising formats 5
Producing a web site is both more
complicated and more expensive than accessing
the Internet for e-mail. In order to establish a
web site using the business name as a web
address, or URL, the domain name must be
registered, at a cost of $100 for two years. If the
URL using a company’s name is already in use,
the company must find another address to use,
unless it can sue the current addressee for
trademark infringement. In order to publish
and post pages that Internet users can browse,
the files must reside on an Internet server. Some
Internet service providers (ISPs) host both
personal and business web pages, and there can
be a huge difference in cost. For example, one
Colorado ISP, which offers unlimited Internet
access to dial up users for $19.95 per month,
charges at least $300 per month in hosting fees
for a business web site. Other businesses do
nothing but host business web sites, and one
may find business site hosting available for
about $20 per month.
There are usually more technical
requirements, and thus additional charges,
associated with e-commerce sites that require
“shopping carts” that allow site users to store
product information while shopping on the site,
or databases of catalog merchandise. Some
hosts are not equipped to handle all the
technologies a firm may want to use, while
others may provide programming services with
a range of fees. Long before a company even
produces its web site content, there are
important issues to address. An investment of
some time in detailed planning of the real
needs, versus wants of the business web site,
may end up saving thousands of dollars in
direct costs as well as avert Internet-related
headaches.
Someone must design the web site look and
feel, create graphics, and write content for the
web site. There are programs, such as Microsoft
Front Page, Claris Home Page, and Macromedia
Dreamweaver that make this process simpler,
but in order to compete with other sites by
making a site eye-pleasing and easy to use,
especially those produced by larger companies,
the investment in a web design firm may be
worthwhile.
In looking for a design firm, look at other
competitive sites and find out who designed
them (frequently sites will have credits and an
e-mail link to the design firm that created the
site). Look at sites that are eye-catching and
simple to use, and contact those creators as well.
One difficulty in working with web design
companies is that their prices can vary wildly,
from a few thousand to more than $20,000
dollars for the same site.
There are a number of “bells and whistles”
that can be added to web sites, such as
animated graphics, sound and video, games,
and small web programs, but sometimes these
features slow the loading speed of a page so
much that users get frustrated quickly and
move on to another site. In order to add interest
and interactivity to a web site, the entrepreneur
may discover that more complex pages are
needed, requiring not just HTML coding, but
also programming with languages like
JavaScript or Java. These features are very
complex and prone to problems downloading,
so something this complicated should probably
be done by a programmer.
In addition to the up-front creation costs,
maintaining and publicizing a web site requires
money and time. In order to maintain an
interesting site to which customers return again
and again, new content and graphics must be
posted regularly. Navigation on the site may
need to change in order to better direct
customers to products, or to highlight new or
sale merchandise. And any messages from site
users must be answered.
In order to find a site, the user needs to find
the address either on the business’s printed
materials, or online by using a search engine.
Each site must be registered with a search
engine, and Internet marketers recommend
submitting notices of new material to search
engines on a weekly basis to keep the address
high on the list of search results. There are
printed directories of web sites that require a
submission, and usually a fee, to include a site.
Both these promotion and ongoing maintenance
activities can quickly be overwhelming, but
advance planning on how the site will be
maintained and promoted is also needed when
designing the site itself.
THE BUSINESS MENTOR — Advertising formats 6
Internet security issues are also important to
address in web site design. Originally, users
were uncomfortable using the Internet for
actual transactions due to the security issues
involved. This concern is still there, though it
has abated as more people have used the
Internet for purchases. Regardless, the
commercial site must meet these concerns, or
the site will not be an attractive e-commerce site
for at least some of its users. Secure servers are
used to encrypt and transfer sensitive
information online, which also increases the
cost of the web site. There are alternatives to the
secure server, including printing out an order
form and having the purchaser fax it; taking
orders online and following up with a phone
call to take credit card information; or offering
the user the option of sending a check and
shipping the order when payment is received.
Each of these options makes the ordering
process more cumbersome, and may decrease
the number of orders, but ignoring security
issues will cost even more in lost sales.
Another issue in using the Internet is the
privacy of user information. Privacy issues
online are a growing concern. Some companies
gather information online and sell it to other
companies. When gathering information from
site users, the users should be offered the option
of giving an e-mail address, with a privacy
statement. Users may fill out a form with false
addresses to keep from giving an address to
someone who will sell it, but may be much more
forgiving if a statement indicates the company
and only the company will keep that
information.
Postcards
Postcards can be a powerful marketing tool and
can increase sales. Sending postcards has many
advantages over other types of advertising and
direct mail. A large percentage of direct mail is
never opened, but a postcard overcomes that
obstacle. Direct-mail pieces often contain
several pages that the recipient has to sort
through before deciding whether to read the
information. A postcard simply has to be turned
over to have the information read. Postcards are
also less costly to design, print, and mail than
other direct-mail pieces.
Another advantage is that if the recipient
does not immediately need a product, he or she
may pin a postcard on a bulletin board or keep
it until ready to make a purchase. This means a
venture could experience a delayed response
before receiving orders after sending a
promotional postcard.
It is critical that the postcard be unique and
compelling and that it communicate a strong
message. There are only a few seconds to attract
attention and to have the postcard stand out in
the mail. To attract the attention, postcards can
use testimonials from customers or clever
phrases or catchy words; pictures, cartoons, or
other graphics; and color.
A strong headline followed by a few
condensed bullet points should complete the
message. When there is a limited amount of
space, the number of words needs to be limited
and still make a memorable impression. The
recipient should be encouraged to take
immediate action by including an incentive. Don’t
forget to include contact information, such as
phone, fax, web address, and address.
Another way to have a postcard noticed is to
use a size larger than the standard 4-by-6-inch
format. Check with the Post Office to determine
the rates for larger sizes. Enlarging the card
costs more but not as much as an envelope
mailer. Benefits can be gained from the impact
of the increased size, and it provides more space
to communicate the message.
As with other direct mail, typically it takes
five to seven contacts before the recipient takes
action. Therefore, a business should consider
developing a series of postcards to keep the
venture’s name and product information in
front of potential customers. The effectiveness
of the postcard campaign and the response rate
should be tracked.
Postcards can be a good marketing tool,
turning leads into sales and developing new
and repeat customers. Remember, when using
direct mail, the right mailing list is a must. This
is the number-one priority for success.
THE BUSINESS MENTOR — Advertising formats 7
Signs
Often, the most effective advertisement a
business can have is a good sign in front of it.
It lets the public know where it is and what
it can do.
City officials in many localities regulate
signs so strictly that the business can hardly be
noticed by people passing by. Some businesses
have great signage difficulty with the
authorities—some to the extent that they are put
out of business by such outrageous regulators.
It is advisable to avoid locations that will not
allow businesses to do what they must do to
succeed.
Some entrepreneurs put big signs promoting
their businesses on their cars and park them in
advantageous locations. If a business has a
truck, the owner should make it a rolling
billboard.
Yellow Pages
The attractiveness of advertising in the Yellow
Pages is that most homes have a copy of the
Yellow Pages book, and people who look there
are usually in a buying mood. Studies show that
about 50 percent of the users purchase products
or services.
The ventures that get the most customers
from the Yellow Pages are those whose customers
are local, whose businesses are used in an
emergency (such as a plumber or a locksmith),
and whose businesses are retail sales. Other
businesses attract few new customers from the
Yellow Pages, especially if their markets are
narrow, with a limited number of customers.
An entrepreneur can determine if prospects
look in the Yellow Pages and if the Yellow Pages
directory is appropriate for his or her product.
Is there is a clear-cut heading under which the
business can place an ad? If there isn’t, the
venture might not get many customers from a
listing.
There might be more than one Yellow Pages
category that classifies what a venture does,
such as word processing services, which are
listed under both “Secretarial Services” and
“Typing.” In this case, it is advisable to find out
which listing contains most of the large display
ads or boldface listings. It is reasonable to
assume that this is where customers look most
often. In some instances, a venture might want
to advertise under more than one category.
Does the competition advertise in the Yellow
Pages? If lots of similar businesses use listings, it
may be worth a try. If there are only a few
businesses listed, is it because this advertising
attracted few new customers? What percentage
of their business comes from people who have
located them through the Yellow Pages?
An entrepreneur who decides to advertise in
the Yellow Pages should make sure the directory
is part of the local telephone company and part
of the local telephone book. Anyone can publish
a business directory, which may or may not be
distributed widely.
It is best to advertise in telephone books that
blanket a target area. When a firm is marketing
nationally, then it would use Yellow Pages in all
appropriate cities, including those in which it
doesn’t have offices. There are also specialized
Yellow Pages such as Silver Pages for seniors and
ethnic Yellow Pages.
Ventures can also consider business-tobusiness
Yellow Pages. Today many large
metropolitan areas have these editions. Ads
should be placed in all the books that the target
customers regularly use.
A smart business won’t direct customers in
other advertising to get its telephone number
from the Yellow Pages. That would send them
straight to the competition. Instead, it refers
them to the White Pages.
Two good references are Yellow Pages
Advertising, How to Get the Greatest Return on
Your Investment by Jeffrey Price, Idlewood
Publishing, and Getting the Most From Your
Yellow Pages Advertising by Barry Maher,
Amacom Publishing. These books list the most
often looked-up headings—such as cleaners,
physicians, department stores, television
dealers, taxicabs, beauty shops, and airconditioning
contractors—for residences as well
as other invaluable information.
If advertising in the Yellow Pages makes
sense for a business, how to design an effective
ad must be considered: study other ads in the
Yellow Pages, especially those that attract reader
attention; notice which headlines, graphics, and
copy are most appealing; make the ad an
attention grabber.
THE BUSINESS MENTOR — Advertising formats 8
The venture’s specialties should be
emphasized by describing the market niche;
that is, what distinguishes the venture in the
marketplace? Brief, attention-grabbing
information should be provided and key
benefits included. Readers should be informed
of all the key reasons why they should buy from
this business. A good rule to follow is not to put
too much information in too little space.
However, it is important to include everything
the venture sells, especially if prospects shop for
specific brands.
If a venture wants potential customers to
come to its location, it must be sure to include
the address, the days and hours the business is
open, telephone number, web address, and
availability of parking. If the location is difficult
to find, brief directions can be given or a map
can be included. Other useful information,
such as delivery service, accepted credit cards,
or financing of purchases, should be included
as well.
Size and price of the ad are also important
considerations. Large display ads generate more
response than standard line listings. A business
should notice the sizes of the competitors’ ads; it
shouldn’t design a small ad if its competitors use
big ads.
The cost of Yellow Pages ads, assessed
monthly, can be steep. The best guideline is to
start at an affordable price level and track
responses, and not put a financial strain on the
business. The smallest business can look bigtime
with a good Yellow Pages ad.
If the product can be represented by a
picture or graphic, then a display ad might be
worthwhile. People looking in the Yellow Pages
are usually attracted first to display ads.
Simple boldface-type listings are twice as
effective as plain ones. Color can double the
costs and is not always cost-effective. On the
other hand, color usually helps draw attention
to smaller ads.
The results of the Yellow Pages ad should be
tracked; businesses should always ask callers
how they heard about the company. If a venture
has multiple phone lines, one number can be
used just for the Yellow Pages ad. But there must
be a backup telephone answering machine. If
potential customers call the number and no one
answers, potential customers will be lost. Name,
address, telephone number, and web address
should be double-checked in the ad before the
directory is printed and after it comes out.
Designing an attractive and effective Yellow
Pages ad takes time, effort, and careful attention.
Although the telephone or Yellow Pages company
will be of some help, a professional designer can
be contacted.
The basis of success for the Yellow Pages can
be appreciated. Its wide range of retail and
service businesses makes it the most significant
advertising medium available.
There is an art to developing this type of ad.
If possible, take the maximum size allowable—a
quarter page. Tactics of effective users of Yellow
Pages:
n Try to convey that the venture has been in
business a long time, implying that it must
be a reputable firm to have been around so
long.
n If services are available 24 hours a day, the
ad should say so. It’s an effective appeal.
n If estimates are necessary and they are free
of charge, say so. Decision-makers are afraid
of unexpected charges.
n If brand names are important, then mention
the ones handled.
n In a large city, provide a map if the buyers
must come to the store. Make it easy for
them to find it.
The White Pages, which are heavily used, are
often neglected by many entrepreneurs as a
good marketing strategy. A venture’s listing can
be upgraded and boldface capital letters, super
bold-face letters, rules, color and other options can
be used.
Classic mistakes
It is worth the time to study some of the classic
mistakes made by entrepreneurs in promoting
their products. Hopefully, these same mistakes
can be avoided. Many new enterprises have
been ruined from their inception by making
some common advertising mistakes.
M The parlay theory of promotion
A chemist developed a line of solutions that
would treat the surfaces of glass in a manner
that they would resist smudging and dirt. The
product was seemingly excellent, but its
campaign was botched by a professor of
management who deemed himself an expert in
advertising.
THE BUSINESS MENTOR — Advertising formats 9
The company’s advertising budget was
$100,000. The professor adopted a parlay
strategy in which the entire $100,000 was placed
in TV spots in the Oklahoma City market area.
For one month the trade area was saturated
with these spots that disclosed the wonders of
the new product line with such brand names as
Visero, Optico, and Scintellex. The theory was
that the sales results would be so astounding
from this revolutionary product that the profits
from the Oklahoma City market would then be
used to enter other markets.
It’s the gambler’s equivalent of laying the
whole bankroll on one roll of the dice. If he
loses, he walks out of town. If he wins, then he
rolls again and then leaves town walking.
Parlay players die broke, for sooner or later they
must lose.
The results were disastrous for a number of
reasons. The company quickly went bankrupt
when it used up its money in advertising.
A venture shouldn’t spend all of its
promotional money right away. One must
budget for the long pull. If an entrepreneur
believes that it is going to take two years to
successfully penetrate the market, then the
promotional money must be budgeted over that
period of time.
Granted, it takes more money initially to get
started. Still, it is best not to spend all of the
money. Some should be left to use later on. The
principle of repetition should be heeded. The
first initial efforts at advertising should not be
expected to yield immediate, landslide results.
Consequently, the basic principle is to
apportion the promotional budget over a
reasonable time span. It is going to take much
longer to promote an enterprise than the
founder believes.
M Advertising before building distribution
Continuing with the example of the glasstreatment
chemical, one of the reasons the
program was so disastrous was that the
television spots were shown at a time when the
product was not in the stores. There was no
place to get the product if someone watched the
ad and thought, “I would like to have some of
that stuff.” It is usually disastrous to advertise a
product or service when the firm is not
prepared to make the sale. Distribution must be
coordinated with promotional activities.
The date on which the promotion breaks should
coincide with some date at which a reasonable
distribution of the product will be achieved.
Even large corporations mess up on this
aspect of advertising because it is difficult to
achieve. Advertising can only do so much, and
it cannot make the sale if the person is not able
to buy the product.
M Amateur night
Perhaps the biggest error is made by
entrepreneurs who deem themselves experts in
advertising. They want to be on stage. They
want to walk in front of the television camera
and deliver a magnificent monologue on the
virtues of the product. Of course, it’s deadly.
Smart advertisers use professionals. They do
not try to do their own promotional campaigns
unless they have good reason to believe they
know what they’re doing. Occasionally,
somebody like Los Angeles’ renowned Ford cardealership
owner Cal Worthington can get away
with creating his own advertising format, but he
is an exception.
Wendy’s founder, Dave Thomas, features
himself in most of Wendy’s television
commercials. He is not a professional actor but
imparts a sincere and believable attitude that
conveys the message: buy from me.
Consequently, his ads receive high ratings and
good customer response.
M Spending the entire budget in one place
The principle of market coverage is vital here. If
the market for a product is widespread and
diverse, not focused in one place, the
advertising dollars must be split among several
media. To spend the budget in one or two places
may miss a large portion of the potential
market.
Admittedly, there is a conflict in advertising
philosophy. There are those who would say it is
much better to focus advertising efforts in a few
media and do so in a meaningful way than to
spread the money among a lot of media in such
a way that none of them is effective. There is no
easy answer. It depends on how much
advertising is necessary to impact any given
target market. It is true that one can easily risk
money, dribbling it out in small amounts aimed
at various markets, without impacting any. Any
medium should be used enough to make its
audience aware of the advertiser’s offer.
THE BUSINESS MENTOR — Advertising formats 10
It is also true that a company can risk money
by over-advertising to any one market. Only the
owner can figure that out. Hopefully, there will
be professional assistance.
M Failure to study competitors’ advertising
Entrepreneurs can learn much by carefully
studying the promotional campaigns of their
competitors. Find out what they think they
know about the market. Study the media that
they use and the appeals they think are
effective. If the competition uses an advertising
agency, entrepreneurs might learn a great deal
by talking with some of its people. Perhaps
some of the intended customers can tell
whose advertising they feel is most effective.
If advertising is really important to a business,
the owner might consider hiring someone who
has worked in the field for a competitor: hire
somebody with experience and know-how to do
what needs done.
Conclusion
Entrepreneurs must make prudent decisions to
use advertising most cost-effectively. Although
large advertising agencies may be beyond their
limited budgets, there are various options for
them to consider that can effectively
communicate to potential customers
information about their products and benefits.
