Stop Lighting Your Money on Fire
Why Are You Throwing Your Money out the Window?
John Wanamaker once famously said, “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.” Unfortunately, this still rings true for marketers and advertisers in the modern age. But do we have to accept our own ignorance and throw our hands in the air like we just don’t care? Hell no. Where that “other half” goes doesn’t have to be a mystery only Sherlock Holmes could solve.
Through my experience managing over $7 million in ad spend over the past five years, I’ve learned a few insightful truths in regards to why we continue throwing our dollar bills into the flame:
Truth #1: You Fail to Truly Understand Your Buyer
Everybody believes that they know their buyers, but when is the last time you actually talked to them? I mean, really talked to them to discover what makes them tick? Have you paid attention to the trends taking place in your market? Has your product or service kept up with those changing trends?
Think about it like going on a first date. You get all dressed up and you’re feeling pretty damn good about yourself. If you spend most of the date trying to woo them by talking about yourself, how can you expect a chance at a second date? You have to get to know who they are so that you’re fully equipped to “sell” them on what you’re offering. The same idea applies with knowing your buyers. Go get that second, third, and fourth date!
It may seem quite obvious, but taking the time to talk to your customers, whether it’s face-to-face, by phone, in e-mails, or social media, and asking them what they want will open your eyes to how you should be marketing. Sometimes we get caught up in what we think we should be doing when our efforts would bear more fruit – juicier ones at that – if we just examined our customers.
If you’re the “a little less conversation, a little more action” type, you should also be looking at Google Analytics to discover how your audience is behaving on your website. Google’s free analytics tool will empower and enable you to spend your ad dollars more wisely.
Case in Point: We worked with a company that sold wall mounts for video game consoles, Apple TVs, and more. They were convinced that over 25% of their target market consisted of females over 50 that wanted to do a little house cleaning after their kids moved out. Through the use of Google Analytics, we determined that less than 3% of their traffic was coming from this demographic. By simply discontinuing the efforts to target that market, we improved their margins by more than 12%.
Truth #2: You Don’t Create Messages that Resonate with Your Audience
Let’s say that your buyer is clearly defined and you know exactly where to reach them. But when you market to them, you realize they are not taking the actions that they “should” be taking. You discover that the messaging is missing the mark, which confuses you because you have identified your ideal buyer. This leads to wasted ad spend because it has the same effect as yelling into the abyss.
Case in Point: We bought online media for a really successful blogger that taught others how to blog and make upwards of 6 figures a year from it. He noticed over the last six months there was a disconnect between his audience and his product. Sales started to slide and there was a significant increase in requests for refunds.
We ended up surveying his audience and they told us that they didn’t care about making six figures online, all they cared about was being a consistent blogger. It was something they wanted to do for a long time and were looking to accomplish this goal. We changed the messaging from making money online to checking “becoming a blogger” off your bucket list. Sales started increasing quickly and refunds were cut in half.
Truth #3: You Can’t Locate Your Audience
This is especially true in the online world. The conventional wisdom is that you must be on Facebook to attract millennials. This used to be true, but more and more, millennials are gravitating towards Instagram and Snapchat.
Offline, people tend to buy ad space because a local media salesperson in their area makes grand promises like “everyone will see/hear your ad”. To be blunt, you shouldn’t give a shit if everyone can see/hear your ad. It’s about hitting the right people. If you are making media buys to try and attract everybody, you will be burning money at a rate that bankrupt celebrities would be jealous of.
Case in Point: Lets move from the online world to the traditional world of print placement. We worked with a tourism committee that placed the majority of their ad spend inside of their state. In fact, the main markets they wanted to attract inside of their own state was upwards of 8 hours away.
By identifying the audience and identifying the messaging that would get them to take action, we looked across the border, in some cases only 45 minutes away. This audience was tired of experiencing the same old, same old in their market and was looking for something different. Once we offered them something different, they came over the border in droves.
Truth #4: You Don’t Know How to Track Your Marketing Efforts
There is so much to say about this topic that we will create a completely separate blog that goes into great detail about how to track the success of your marketing. But for now, let’s talk basics. You must find out a way to track the reach of your print placement, billboards, radio ads, TV ads, and any online marketing. Good news is that it is easier to do than you might think.
It all starts with a vanity domain. This is mainly used for offline marketing because online marketing is, by nature, much easier to track. For example, if you are running a bank in Texas, instead of using its regular domain in your ads, buy one for $10 called BestBankinTexas.com. Set up that domain so that it redirects the visitor to a page on your site that already exists and place that URL in your print ads. That way you’ll know that whoever visits your site from that domain did so because of your print placement.
Case in Point: We work with a tourism entity that has numerous print buys both in and out of state. To track them independently, we created one vanity domain for in-state buys and one for out-of-state buys. We noticed that one placement was driving 12x the amount of traffic that the other placement was bringing in. With this information, we got rid of the placement that wasn’t performing as well, saving them over $3,600 per year.
Truth # 5: You are Unable to Understand Today’s Buying Decision Process
Did you know that 91% of buying decisions start online? From looking for a place to go on vacation to looking for more information about a camera, the internet has completely changed the way consumers make purchases. With that being said, over 94% of purchases are made locally.
Imagine this scenario: You wake up this morning and decide you need a little pick-me-up and grab a coffee. You notice that your gas tank was running low so you fill it up at a nearby gas station. In the afternoon, you go out for lunch with a colleague. On the way home, you stop by the grocery store to buy some ingredients so you can cook dinner for your kids. Of course, all of these purchases were bought locally; you’re not going to go online for everyday items like that. Those purchases add up to the tune of $.94 of every $1.00.
A lot of people mistakenly believe that online spend will be more than what it really is. Don’t get me wrong, the amount of online spend is still astronomical, however, there is a reason that Amazon is in the process of building shopping centers throughout the United States.
Case in Point: For every client that we work with, it is imperative that Google Analytics is set up so we can easily track people’s behaviors. If people are interested in your product or service, they will go to your website to find out more details about you. People are doing their due diligence to find out about your company and what it offers. Are you trustworthy? Do you have satisfied clients? Does your offering provide solutions to their problems? You need to track their “journey” in finding answers to these questions to know how many people you are reaching with your marketing efforts.
As I mentioned before, I will get into the nitty-gritty of exactly how to track this in another blog, but this little nugget of knowledge alone saves our clients tens of thousands in marketing spend. Through analytics and reports, you can eliminate what isn’t working and put that money towards what is.
With these five truths, my goal is to help turn John Wanamaker’s quote into an untruth. Keep an eye out for future blogs as I will break down each one of these truths into further detail, giving you actionable advice that you can apply to your business right away.
If you can’t track the effectiveness of 50% of your marketing and advertising dollars, let me help you shrink that number down to 10-15%.
So the question is, are you ready to save thousands of dollars?
changed the subheading because it was essentially the same as the title