What Advertising Budget?

Here’s a question for you, “If one of our greedy little banks offered a deal on one dollar coins for fifty cents, how many would you buy?”

Most normal people would say, “I’ll take the lot”, right?

Why then do companies have an advertising budget?

If your advertising budget works, and you can demonstrate that you are making a profit, then why not keep buying advertising until you reach a diminishing effect.

Maybe the better question is: ‘If your advertising isn’t working, why are you continuing to do it?’

We hear this daily from prospects who sit down with us to discuss an inbound marketing strategy. The canned answer is generally, ‘We’re not quite sure what part of our budget works, we can’t really measure the actual performance of that billboard and TV campaign that we ran last year.’

‘Did you get an increase in physical sales or enquiries into the business?’ we ask, ‘Well that would be sales and we don’t really communicate that well with them’.

Online advertising is completely different; advertisers can identify their cost per click and sales per click (right down to the cent) and without too much work, can guess the lifetime value of a click (do you know your life time value of a customer?). Once you have these key metrics, and it’s positive, then BUY, BUY, BUY … right?

If you’re buying online advertising and you DON’T know these metrics, then why are you continuing to buy? Are you carrying the same bad habits from offline to online?

How often do you hear someone in marketing state, ‘That’s a great idea for a campaign, but we don’t have the budget?’

Shouldn’t they say, ‘We have an unlimited budget for measurable advertising that works’ …