An advertising plan helps a business or company promote a product or service, reach a new customer base, build awareness in the market, and increase sales. Developing an advertising plan assures that your dollars will be spent wisely and target the right audience.
Plan Development
There are many steps to developing an advertising plan. These steps will vary depending on the type of product or service promoted and a business' advertising budget.
Step One: Establish a Budget
A business plan includes operating costs, which should include a budget for advertising. The cost for different advertising methods differs depending on the length of time and extent to which it will be used. Some forms, such as email marketing, cost less than others, such as television commercials.
Because there is no single cost associated with any one advertising method, develop a budget that fits within your company's finances. There are three ways to establish an advertising budget:
- Set a gross amount per month or year derived from normal operating costs.
- Establish a percentage of estimated annual gross sales to dedicate to advertising based on the status of the company (new vs. established) and purpose for advertising.
- Set aside an amount of funding from the general business operations that can be used for advertising on an as-needed basis.
Choose whatever will work best for your company and add it to your business plan. This ensures that you have the money set aside for your advertising needs and that your business can afford to spend those funds on advertising.
Step Two: Research Your Target Audience
Effective advertising depends on understanding the habits of your intended audience. This helps you maximize the impact of spent marketing dollars. To complete this task, review:
- Ad placements directed to the same audience: This will tell you how the audience is commonly reached.
- Buying patterns for your product or service: This will tell you how often and through what methods (online or in-person) the product or service is commonly sold.
- The typical location of customers: Do your customers only live in one part of town? If so, you might concentrate your advertising in that area.
- Customer use of coupons: If you anticipate them frequently using coupons, a direct mail campaign of coupons might help you obtain new customers.
- Timing: Is your product or service mainly purchased or used during a specific time of year, such as over the holidays? If so, this may dictate when you advertise.
These considerations help you narrow down how, when, and where to reach your target audience.
Step Three: Develop an Advertising Plan
After setting a budget and researching your customer base, it's time to craft your advertising plan. The advertising methods you use depend on your audience and funding. There are several different methods available, including:
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Print advertisement: This type of advertising includes anything that can be put on paper, including ads in newspapers or magazines, booklets, direct mail or flyers. A 2012 article on AdAge.com reports that only 33% of print advertising is effective. However, also in 2012, Forbes.com reported that print advertising could be extremely efficient due to the increasing number of companies using online advertising, thereby allowing print marketing to stand out. Print advertising allows for target marketing, and that it is often more engaging than other forms of advertising.
- Newspaper or magazine ads: These advertisements reach readers of specific periodicals. The available sizes and costs of ads depend on the publication's popularity, readership, and the area in which it is sold. Media Sales Today reports that that 79% of adult newpaper readers say that they purchased something because of a newspaper ad.
- Booklets: Booklets are usually distributed to customers by hand, perhaps during an initial consultation. Therefore, this form of advertising reaches only those individuals receiving a booklet. The cost of booklets depends on their size and the amount of formatting required. TopDesignMagazine.com reports that booklet advertising is effective when a customer already has familiarity with a product or service.
- Direct mail: These advertisements are sent directly to current or potential new customers through regular mail. They typically consist of a letter or a postcard of varying size. Their cost depends on printing and formatting expenses as well as mailing charges. A 2011 survey by MarketingSherpa.com found that 57% of business-to-business companies believed their direct mail campaigns to be effective. The report states that companies in the business services sector found this type of advertisement the most beneficial.
- Flyers: Flyers can be distributed just about anywhere, including parks, other businesses or at special events. They normally consist of a single page that provides the basic information, perhaps in bullet points, of your business. They are one of the less expensive forms of advertising. Zelen Communications states that the return on flyer advertising is visible through the sheer number of businesses using the technique.
- Email advertisement: Similar to print advertisement, email advertisement directly contacts current or potential customers. An email can contain any and all information you want. Although there is no cost to sending an email, you may have to pay a third-party marketing or advertising company for a mailing list. Mail Chimp states that their average open rate on business and financial email advertising is 20%.
- Media advertisement: This includes radio and television ads. The cost of these ads can be quite high because they require purchasing radio or television slots and putting together either a recording or video to showcase your businesses' products or services. However, if you find that your target audience spends a lot of time in front of the television or in the car, this option may be one of the best ways to advertise. In 2012, PR Newswire reported that television advertising was facing declining efficiency due to increasing use of DVRs. Hawkeye Management reports that radio advertising is effective for adults 18-34 and for individuals who live in areas where long commutes are the norm.
- Online advertisement: Online advertising includes placing banners or other types of ads on web pages. These web pages can be for other businesses, news agencies, or any other type of page that you feel your target audience would visit. Often, your ad contains a link directly to your company's website. In 2013, The Atlantic reported that revenues due to online advertising were increasing.
There might be other forms of advertising suitable for your business. If you believe this to be the case, consider investigating the advertising methods used by your competitors.
Step Four: Implement Your Plan
To reach customers through advertising, you must actually advertise. This means that once you've developed a plan and chosen the means to advertise, it's time to purchase the products and set aside the time you need to engage in your advertising campaign.
The Final Step: Measure the Results
The final step in any advertising plan is to measure how well the plan worked. This requires considering:
- The amount of return on your expenditure: Did you gain enough new customers or increase sales to the point that your advertising costs were covered? Did you actually earn more money by advertising using the method you did?
- New customer rates and retention: How many new customers did your business obtain since implementing the plan? Did you retain those customers?
- Current customer retention: Did your advertising keep former customers returning to use your business?
If the benefits of your plan are obvious and in the positive, you likely had an advertising scheme that worked quite well. If, however, your business did not grow as expected, it might be time to revise the budget you dedicated to or methods you used for advertising.
