If Business is Slow, Don't Cut the Ad Budget
Apr 15, 2008By Clay Campbell
Wizard Partner & Author "Get Big Results From Your Small Ad Budget"
The marketing person at our local state park told me her ad budget had been severely cut; almost in half. Another business owner told me he was going to cancel all ads because he needed to re-evaluate everything.
The economy is a topic of discussion just about every day with every business owner I talk to. I hear and read things like, “My Business is slow, so I have to cut back my advertising.”
It seems that some small business owners are in a difficult situation this year with the uncertain economy. However if business is slow, and you cut the ad budget, does that make much sense? You might say, "What would you do?" Well several things come my mind.
- If my business were slow... I’d advertise like crazy.
- How can I afford not to? I went broke in 1981 and it’s still fresh in my mind; and it’s not any fun at all. My first rule of business is: Don’t go broke.
- I figure if other businesses are cutting back their advertising then the listeners and readers would hear and see my ads more often.
- Next you should be making more money than you spend. Mamma always told me you should save for a rainy day; well, it’s raining.
- You should decide on a certain % of your gross sales and always spend that on advertising and marketing. If you grossed $500,000 in 2007 and you have budgeted 10% for advertising; then you should subtract your cost of exposure (rent) then multiply what’s left by your mark up. What you then have left is your ad budget. In 2008 if you do only $450,000 you should still figure it the same way. Do the same % no matter what.
- Keeping your name “out there” would keep up your share of voice and may very well increase your share of market. Read An Advertisers Question
To quote Roy H. Williams
“Bottom line - Every business owner must decide for themselves what percentage of their profits to take out of their company and how much to re-invest in their facilities, equipment, advertising and people. Sadly, due to the near-universal fear that "If it doesn't work, I've wasted my money," very few business people are willing to advertise as aggressively as they should.”
People will buy from people they like and trust about 90% of the time. If your advertising is causing people to like and trust you, it's not ever wasted; even though it may not be making your phone ring right now.
References (1)
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Source: Are You Advertising Aggressivly?
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