ADVERTISING: Standing Out in the Crowd Takes Planning, Savvy and Control
Waste begins when you are "sold" advertising instead of "buying" it. Then your program is not really "programmed" but, instead, is the result of successful sales calls made by eager media representatives.
Getting your ad dollars to produce more takes sound budgeting, astute buying and productive designing. But before you start planning, there are two personal resolutions that need to be made.
You Make the Decisions
"Nobody counts the number of ads you run, they just remember the impression you make." – John Elliott
First, make all the major decisions yourself. Even if you eventually accept the recommendations of the newspaper or Yellow Pages ad salesman, make sure it is your decision based on your experience and your store’s particular needs.
Second, put yourself in the customer’s or prospect’s shoes. Note the many poor commercials on television or cluttered newspaper ads, some so awful that you know you could create better ones yourself. These advertising misfires often miss the mark because they got too cute, the advertising agency was aiming for an award instead of a sale, or the advertiser was trying to shove 20 pounds of information into a five pound sack.
You know your customers and prospects better than anyone else does. So in the final advertising decisions, and after all the expert help has been received, do the deciding by targeting your store, your market, and your customers.
First Puzzle: How Much?
Before all else, decide how much you should budget for advertising in the entire year. This consideration often goes hand-in-hand with determining your advertising goals. Budget size and goals are necessary preludes to the ultimate decisions on media mix, the design of ads and timing.
Usual recommendation for an ad budget is an amount equal to 2% or 3% of annual sales volume. This 2-3% would be in addition to any co-op contributions from suppliers.
The size of your store must influence the percentage of sales you allot to advertising. The smaller the store, the more it should spend proportionately on advertising. Larger, more established dealers will spend less proportionally. Average annual sales by tire dealers is $1.417 million, according to the Tire Review 2001-02 Dealer Profile Study.
Smaller Stores Need 3%
Generally, the smaller retail stores average almost 3% of sales for advertising. The largest classification, companies with annual sales of over say $1 million, spend just over 1% of sales for advertising.
Other factors influencing the size of your ad budget would be store location and how well established you are. For instance, in a major shopping center with plenty of traffic, you can scale down your budget since you benefit by having a high-traffic location.
If you have a new store, consider spending upward of 10% on advertising. Once established and earning referral business, you can sharply reduce that initially heavy ad budget.
Never rely just on "word of mouth" advertising; it may be the best and certainly the cheapest, but it is also the most inconsistent.
Four Ways to Plan Budget
There are at least four ways to establish an advertising budget. First is the "haphazard" method which actually is no system at all, yet is quite common. This is based on reaction rather than forward planning – suddenly deciding to run an ad because it’s Spring or because you remember having one about this time last year, thanks to a reminder from the media salesman.
Then there is the "competition matching" method. You figure how much your competition is spending and match or exceed that effort, even in the same newspapers or other media. This means you are letting your competitor dictate your advertising rather than working to outfox and outflank them.
The "sales percentage" method of ad budget-setting is one of the most common among progressive retailers today. This works very successfully provided you retain flexibility to meet special needs such as promoting a new service or product line.
Basis of the sales percentage method can be either last year’s sales volume or a projection for the coming year. Most experts advise pegging the percentage to what you forecast for sales next year in order to factor in some growth goals, but retain the flexibility to adjust as necessary. A third of tire dealers base their ad budget on what was spent last year (same-old, same-old technique) while only 6.5% schedule advertising as a percentage of projected sales.
The last method is the "task technique," probably the best of them all but the most difficult to use. This requires detailing all the goals and tasks that you want advertising to accomplish and then computing a cost figure to accomplish each. The concept is sound and should ensure there are no wasted advertising dollars. But not many retailers plan ahead sufficiently to make the task technique work.
Percentage/Task Combination Best
Probably the best route would be a combination of methods – basing your budget on a percentage of sales while allocating some for some particular tasks you need advertising to accomplish in the coming year.
A word of caution about any budget figure: you probably will exceed whatever figure you set. Count on it. While most experts recommend setting a budget and then sticking to it, inevitably there will be special needs, events or opportunities that you fail to anticipate. Be prepared to bend the budget.
Defining Your Real Goals
"There is no such thing as ‘soft sell’ and ‘hard sell.’ There is only ‘smart sell’ and ‘stupid sell.’ – Leo Burnett
Once you have established the size of your ad budget – say 2.5% of a projected sales volume of $1.4 million or approximately $35,000 – the next step is to clearly define your advertising goals.
You want your advertising to help drive sales, but don’t expect it to do too many things at one time.
Unless you have an unlimited budget, it is nearly impossible for advertising to at once generate traffic, move merchandise, attract new customers, create goodwill, build store identification, promote events, win customers from the competition, introduce new merchandise or services, increase volume in slow months, boost profits, add excitement to shopping, enhance the store image.
Advertising is not the ultimate curative, and you can’t expect success if you expect a basketful of goals – sometimes divergent – to be met. A rifle is more accurate than a shotgun, so prune your list to concentrate on the most important goals you need to meet.
One recommended guideline is that every ad should sell the store, building your "brand" by creating familiarity and comfort in the minds of consumers. You can add spice to your aims, like moving merchandise or winning new customers, but the prime goal should be brand building.
Timing and Selection
After firming up what your advertising is to accomplish and how much to spend, your next two steps will be to decide "when" and "where." This involves scheduling advertising and selecting media.
"Shoot when the ducks are flying" is the oldest and simplest recommendation on how to schedule advertising. This means planning your advertising just ahead of peak sales periods.
Check your monthly sales receipts from last year to see when your hot periods were. Supplier promotions can also guide ad timing. And then there are always the old stand-bys – pre-vacation and pre-winter, mid-year holidays like Memorial Day, national car care month, and so on.
Unfortunately, some of these might pit your advertising against that of the competition, but by knowing your customers and market you can tune your spending to optimum periods. Again, you know your market, and it’s your decision to make.
It’s a mistake to shoot only when the ducks are flying. Don’t focus your entire ad budget on just a few periods or specific events, leaving nothing for a year-round effort. Off-season advertising will enforce your message when the season finally opens.
But Where?
The next step is media selection, usually the toughest and trickiest decision affecting the potential success of your program. Where you want your ads to appear should be more a function of what options your market presents, what your customers read, watch or listen to, and what kind of customers you want to attract than what your competition does or your own personal desires.
What media your customers use is the vital question that needs to be answered. And the best people to ask are your customers.
Most media representatives can also provide reader/viewer/listener demographics, broken down by gender, age and income levels. The U.S. Census Bureau offers a wealth of free regional demographic data on its Web site.
Your tire supplier may also be able to provide valuable demographic information about vehicle ownership patterns in your market area.
TV Isn’t Too Expensive
If you want to make a strong impression, use television. Don’t immediately rule out this medium because of cost. There are some deals to be had if you look for them. The explosion of cable TV and its hundreds of channel and program options has made it harder to bring concentrated focus to television advertising, but it has lowered the cost for air time.
Local network TV might be a solid option, especially around special high viewership events like the Olympics, election coverage, sports playoffs or championships, or awards programs.
Radio is another great option if you want a strong impression quickly and relatively inexpensively, and with the advantage of being able to focus on a certain customer type. For instance, women are more likely to listen to daytime programming while men are active listeners during rush hours.
Like TV, radio has exploded and splintered, primarily along gender and age lines. Political or home/family-oriented talk shows. All-day sports. Oldies, Top 40 and alternative music. Picking the right options should be based on your target customer.
Community newspapers are the most heavily read publications anywhere, with daily newspapers trailing behind. Everyone wants to know what’s going on in his or her neighborhood, and are more apt to support local businesses. But if you’re looking to expand your reach, local daily newspapers could be a good bet.
Trying to gin up more local sales? Direct mail – either broad-based or selective – should be looked at closely. You might even target direct mail to employees at certain local businesses.
Local "shoppers," the small free ad circulars like "Pennysavers", that are distributed at local stores can be another way to build awareness and drive local sales.
Yellow Pages is the choice for most tire dealers, even though consumer involvement is based on emergency need and not long-term image- or awareness-building. Yellow Page ads are a good idea, as long as you are doing other advertising to build recognition.
Specialties, like give-away pens and calendars with your store’s name and brief message, are excellent. They are "selling" whenever these practical items are used. One bit of advice here. Don’t let your ego lead you into buying the most expensive specialties. A 50-cent pen will carry your message just as well as a $2 one.
You might also consider some non-traditional avenues like church bulletins (always looking for sponsors) and even coupons for the trusty Welcome Wagon to distribute for you.
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Television Advertising Who Can Create/Produce: Agency, TV station, cable operator. :30 Rate Range/Local Station/Mornings: $50 – $1,000 depending on market and demand. Recommended Frequency: At least 20 commercials/week for three weeks. Pros: TV is the most powerful medium. It builds awareness, traffic, problem/solution and it is memorable. Cons: High cost. General Effectiveness: It may take a little time to build results. Cable zones may be split out of larger areas. Information courtesy of The Arras Group |
Purpose Dictates Media Choice
The type of advertising you decide on will affect your media selection. A sale special or discount ad is best suited for newspaper or direct mail rather than radio or TV. No wonder print is so full of price advertising while broadcast often focuses on store image.
One more tip on media selection – concentrate on one or two media in particular. You may want a mix and use several media, but experts say it’s best to put most of your eggs into fewer baskets for maximum impact.
Yellow Pages advertising remains the most popular for tire retailers, used by almost 60%, according to Tire Review’s 2001-02 Dealer Profile Study. Next in order of popularity were newspaper, radio, community service and direct mail. Television and telemarketing were far down the list.
Nationally, the distribution of ad dollars by local retailers for 2002, as projected in a spending study by Robert J. Coen, senior vice president at McCann-Erickson, are:
- Newspaper, $39 billion (up 1.5%)
- Radio, $15 billion (up 2.5%)
- Local TV, $13 billion (up 4%)
- Yellow Pages, $12 billion (up 1%)
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Radio Advertising Who Can Create/Produce For Dealer: Agency, radio station. :30 Rate Range/Morning Drive Time: Under $100 in a small market, up to $600 in a large market. Recommended Frequency: At least 20 commercials/week for three weeks/station. Pros: Human voice, emotional touch. Repetition is good. It can hit the consumer in the car on the way to a purchase. Cons: No visual. Inconsistent listening times. General Effectiveness: Can target a concentrated population or specific generation. Information courtesy of The Arras Group |
Designing Your Ads
"If an ad campaign is built around a weak idea – or, as is so often the case, no idea at all – I don’t give a damn how good the execution is, it’s going to fail." – Morris Hite
Last advice for making advertising decisions: focus on ad design. This is where many retailers are at a loss. Here are some basic guidelines:
- Make your advertising easy to recognize. Have consistency in look, personality and style.
- Keep it simple. Whether it’s print or broadcast, remember that the customer’s attention span is short, less than a minute usually.
- Focus on one thing. Better to spotlight a single attribute, product or service than an unfocused mix. Some of the best tire dealer advertising is not price-oriented with box after box of micro-type sizes and prices, or blatant (and meaningless) claims of being "the low price leader." Rather, they are ads that help build trust in the mind of the audience. There is room for the assortment type ad that presents your broad variety of merchandise, but it should not by your main or only focus.
- Always show the benefits of your business. Just like your selling technique in the store, have your ads concentrate on what your business – or particular product or service – will do for the customer rather than on their features.
- Make it timely. Tune into the season, the times, even the weather in order to trap and hold interest.
- Finally, always include store name, address and phone number. You’ll never believe how often this simple element is forgotten.
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Advertising In Brief
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Getting Help
Seek inexpensive professional help with your advertising campaign. Sound advice could prompt you to change some of your earlier decisions on budget, goals, schedule, media selection and creative concept. But don’t change your mind too quickly, and measure any professional advice from the vantage point of your experience as a tire retailer.
Where to find expert help? There are many good sources, such as books, magazines, the Internet, bureaus, or even a night course in advertising at the local community college.
One readily available source of help is your colleagues. Look over their advertising efforts and find out what worked and what didn’t with a few questions. You can learn from the competitor, too. If he runs a big ad, have someone drop into his store to see how it is pulling.
Media salesmen are excellent sources of expert help, provided you remain a discriminating buyer.
Many media outlets also offer advertising creative services to their customers. This can be a big time and cost saver, if used effectively. Remember, you know your business best.
One other bit of advice: Keep it fresh. Too many retailers stick with the same old tired ad creative year after year after year. While some successful companies have built recognition around a simple catch phrase or neat slogan, these same firms keep their ads updated.
Repetition may build your name early on, but repeating yourself for too long will cause your audience to simply tune you out.
An Ad Agency?
Depending on your budget or media of choice, an advertising agency can be a big help. Media salespeople are just that – salespeople. The "creatives" in an agency are trained to develop winning ideas that will help separate your business from the pack.
Of course, an agency may be too expensive, but it never hurts to inquire. One good way to select an ad agency is to listen to its satisfied customers. Who do your colleagues recommend?
Talk to several agencies and find one that is expert in your type of business and with the type of media you have in mind. You might be able to have two agencies draw up a sample program for you. They might not give this much effort on speculation, but even if it’s only an idea or two, you can get a feel of who would be right for your program.
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Direct Mail Advertising Cost to Create/Produce:
Additional Costs: Postage, mailing list, handling. Who Can Create/Produce for Dealer: Agency, printer, freelancer. Recommended Frequency: Three to four consecutive mailings with a consistent message. Pros: Targeted to a specific audience, cost-effective/unit, and can drive traffic. Coupons may make it easier to track. Cons: None. It usually complements other marketing elements. Ð TV, radio, PR. General Effectiveness: It can be measured, tracked and adapted depending on findings. Information courtesy of The Arras Group |
Don’t Forget to Measure
"A good ad which is not run never produces sales." – Leo Burnett
One of the most popular comments about advertising was probably written by an ad salesman: "Advertising doesn’t cost – it pays."
Maybe it does and perhaps it doesn’t. The final step toward a sound ad program is to measure effectiveness – are your ad efforts meeting your goals at a reasonable return on your investment? The sooner you find out the better.
If your ad program is successful then by all means stick with a winner. If it’s a loser – that is, it’s not accomplishing the goal(s) you established – then the sooner you find out the better. Swallow your pride and the misspent dollars and make the necessary changes at once.
How to measure advertising effectiveness? In general, it is very hard to get an absolute true picture, but you can get a fair idea of how well your efforts are producing.
Measuring effectiveness is easy with a newspaper ad that includes a coupon. Just count the coupons in your cash register. Direct mail also can have an occasional response coupon to measure effectiveness. But coupons are not a realistic option for TV or radio.
One method is to check your register total in connection with any sale or special event advertising. Or, if the effects are more intangible, such as image- or awareness-building, then ask a customer how they first heard of you.
Some retailers even have a questionnaire which asks the customer to indicate which newspaper, TV channel or radio station they usually turn to (this can also help you better target future efforts). Or you could make a few phone calls to learn if customers recall seeing or hearing your advertising.
Don’t just rely on friends, neighbors or family – they’re probably going to shop your shop anyway. You’ll get more useful input from those outside your immediate circle.
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Yellow Pages Advertising Who Can Create/Produce For Dealer: Agency, Yellow Pages Rate Range for Full-Page 2-Color Ad: $2,750 – $4,250 Rate Range for 1/2-Page 2-Color Ad: $1,400 – $2,150 Rate Range for 1/4-Page 2-Color Ad: $700 – $1,100 Pros: There when people are looking for you Cons: There only when people are looking for you General Effectiveness: Make sure your phone number, address and Web site (if you have one) are available. Ad should be large enough to read easily. Information courtesy of The Arras Group |
Name an Ad-Store Coordinator
A great improvement in your advertising will come by designating an individual to coordinate the store with your advertising. This might mean special tie-in displays, posting the ad in your store and certainly tuning in salespeople. This same person should be in charge of measuring advertising effectiveness.
Final step in any ad program is to keep a history. Record the expense and results of each ad along with a copy of the ad. This makes your job easier when you plan next year’s program and creative. The result should be more productive advertising and less waste of those precious ad dollars.
Any tire retailer wanting to increase sales volume usually is urged to "spend more on advertising."
But many retailers already are spending enough on advertising, sometimes even more than enough. The primary concern should be on wasting less of what they now are spending – getting more bang for their ad buck.
