Setting and Working within Your Advertising Budget

In This Setting and Working within Your Advertising Budget

•  Figuring out how much you can — and should — spend on advertising
•  Buying ads where your potential customers look for them
•  Making the most of your budget

Companies like Procter & Gamble, General Motors, and McDonald’s spend more on advertising each year than the average small to mid-size business could ever hope to gross in a lifetime. No one knows (and the companies aren’t telling) what their advertising budget to gross income ratios actually are, but you can bet they’re high. These companies have spent a king’s ransom to successfully position their products to be top-of-mind with the entire buying public — and it costs them a yearly fortune to maintain this branding of their products.

If one of these big company’s products begins to slip in overall sales, it throws $25 million in extra advertising funds at the problem without a second thought. The total amounts of their ad funds are simply astounding — for example, Coca-Cola spent $2.5 billion on advertising worldwide in 2005.

You, on the other hand, very likely look upon your advertising dollars as a seriously important personal investment — an investment that (shudder!) comes right off the bottom line and, therefore, is never a part of your hardearned take-home pay. For this reason, you need to do some careful planning as you decide what percentage of your gross sales you can realistically afford to spend for advertising. You don’t want to overdo it, but you can’t skimp too much either. As with many things in life, balance is what it’s all about. 

In this Setting and Working within Your Advertising Budget, you discover what some companies spend on their advertising so you can decide what you want to spend. You also take a look at how and where your competitors are advertising and why it’s crucial to know exactly who your target market is and how your business can appeal to it (if you don’t already!). I also give you tips on how you can get the most bang for your advertising buck by weighing the pros and cons of advertising in major or local newspapers; in national, regional, or specialized magazines; on radio; on broadcast or cable TV; and on the Internet.