Researching and evaluating your competition

A good step to consider when devising your advertising plan, and planning the extent of your budget, is to analyze what your competition is doing. In Buying the Different Media, I give some guidelines and relative costs for all media, but you can pin it down even further with a few well-placed phone calls in your own area. Here are some guidelines:

• Do you see ads for your competitors in the newspaper on a regular basis? If so, call the paper and ask for its retail display-ad rate in order to figure out how much the competition is spending to advertise there.
• Do you hear competitors’ radio commercials often? Call the station’s sales department and ask about its rates. A salesperson will likely tell you precisely what your competition is spending so she can talk you into doing the same thing.
• Does your weekly mail bring coupons or brochures from your competition? Again, contact the vendor of the mail pack that sends these coupons and find out what those ads cost.

Why should you want to know what your competition is spending? Because this information gives you some basis for planning your own budget. Forewarned is forearmed, which in this case means that gathering information about the other guys helps you make a quantified judgment as to how much you need to spend in order to compete with them. If you own a momand- pop hardware store, you may have a tough time generating a budget that can compete with the monster-size warehouse stores — but don’t panic. Simply outspending the other guy (or even trying to keep up with him) isn’t the whole answer. 

You may be relieved to know that you can spend a lot less than your competition and still make more of an impact by being more creative with both your message and your media buying. You can make up for a lack of money with an abundance of creativity and careful — no, make that diligent — media negotiation and spending. You can also make your available advertising budget stretch if you don’t waste any of it on irrelevant media that brings you little or no business. 

Regardless of the limits of your ad budget, and whether you’re trying to reach a broad audience, accept this as a given: You can afford mass media. You can afford to buy radio commercials, ads in a mass-circulation daily newspaper, spots on broadcast television and cable stations, ads in the regional editions of major magazines, and a variety of Internet advertising, including your own Web site. This media may, at first, appear to be unaffordable. But, regardless of the expense (which may be less than you think), when you consider how many people you can reach, it’s the smartest way you can spend your money. 

What you can’t afford to do is fritter away a limited ad budget on questionable media, like the dozens of ads you find in your mailbox every day, that are better suited for wrapping fish than they are for attracting new customers to your business. The old saw “You get what you pay for” is never truer.