How Much Should I Spend on Advertisements
A person is exposed to 3,000 advertisements a day. That is, everywhere we look we are likely to come across the logo or name of some company. It is not surprising then that the world’s businesses, whether large or small, invest a part of their capital in advertising. But how much are we talking about?
If you are reading this article, it is very likely that you have a business or are thinking of founding one. If so, perhaps there is a question that has been hanging around your mind for a while and does not let you sleep at all. Maybe it’s even one of the reasons why you still don’t dare to take a step forward with your company. We mean how much you should spend on advertisements.
Don’t worry, you’ve come to the right place. Relax, take a seat and continue reading, as we will reveal some factors that you must take into account, as well as some strategies, which will help you define your advertising budget.
What Is Advertising?
Before you start talking about amounts, percentages or strategies, it is important that you know what advertising is. After all, if you are going to invest in something, what better than to know where your money is going.
According to the American Marketing Association, advertising is the action of placing ads and messages by a company or entity. Its objective is to:
Persuade or inform members of a particular market or audience.
With these definitions we can say that advertising is the action of placing a message in a media to try to persuade and inform a target audience. But to make more sense of this concept and better understand why it is important for your business, we will define these functions of advertising.
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Advertising provides information
Based on Monferrer Tirado’s book, we understand that advertising is informative because it communicates to people about the existence of a product or service. That is, if people don’t know you exist, how could they buy from your business? In addition, advertising allows the public to know the features and benefits offered by your articles or your company.
To all this, add that thanks to advertising you can keep your customers informed of any changes in your products or services. For example, the increase or decrease in prices (whether permanent or temporary), new presentations, etc. And of course, not only inform people of what you sell, but of your company. With advertisements you can make your trademark known.
Advertising seeks to persuade
On the other hand, we say that advertising persuades because it tries to influence people’s behavior. And we are not only talking about them buying your product or service, but also about preferring your brand over others in the market. For example, with an ad you can try to tell the customer that your products are the best and therefore should approach your store instead of the one in front.
We can also mention that advertising tries to get a customer to buy at a certain time, to want or agree to communicate with you and to change their perception of an item. That is, with advertising you can make people modify their routine, tastes or even ideas so that they become your customers.
With all of the above, you may realize that advertising is more than just handing out flyers on a corner, paying for a social media ad or for a space on the radio. Practically, advertising is all that activity with which you try to inform people about your products and services, as well as persuade them to consume your brand. Advertising can give you a presence among people and make you stand out among your competition.
In Which Media Can You Advertise?
We have already seen what advertising is and what its main functions are, so you have already realized its importance. Now, if you want to promote your products, services or your company, how can you do it? Is there a means to promote yourself?
Maybe when you hear the word “advertisements” you think of some huge sign on the street or someone handing out flyers on the sidewalk. However, there are many more ways to promote your company, as well as many dissemination channels (even more so with the advancement of technology).
With that definition, you shouldn’t be surprised when we say that there are many means to advertise. Of course, each one has its characteristics, advantages and disadvantages. Here we mention the most popular or those that may be more profitable at some point, either to promote your product, attract new customers, position your brand or inform your consumers:
Promotion in print media
As the name implies, they are those in which the information is presented printed on a paper. Among these we can name newspapers, yellow pages, magazines and even flyers. This type of advertising has very good credibility among people. According to data from INMA, 82% of consumers trust print advertising when making a purchase.
As if that were not enough, advertising in print media can give you good results, as long as you know how to use it. According to the site mentioned, print ads offer a return on investment of $3.94 for $1 spent. That is, you can almost quadruple your investment.
Now, you should know that this type of advertising can be expensive. The price for an ad in a newspaper or magazine can vary depending on the size of the advertising and the circulation of the medium. Thus, an ad in a small circulation newspaper can cost $50 on average. However, in a mass-circulation magazine it can be worth more than $1,000.
This is another conventional means of advertising and can also be quite effective, because to begin with radio is considered one of the media with the greatest reach. At home there may be no electricity, but there is a radio with batteries. And for you to see that scope we are talking about, we tell you that 75% of households have access to radio, according to UNESCO.
On the other hand, research indicates that radio can be a great ally of physical retail businesses, since every dollar spent on radio advertising generates a return on sales of $ 6.
Regarding the investment required by advertisements in this medium, you should know that there are several factors that are taken into account: transmission schedule, audience level of the radio station, duration of the advertisement, etc.
According to Fit Small Business, radio advertising costs range from $200 to $5,000 per week, depending on the factors already mentioned. To that figure you must add the costs of creating your commercial, such as the rights to the music, voice actors and editing. These can represent an extra investment of $1,000 to $2,500.
With the advance of the internet in the world (according to Statista there are 4.57 billion users in the world), television has perhaps lost a bit of strength as a means of communication and entertainment; since Google points out that 6 out of 10 people prefer to watch videos on the web than television. However, it still has a significant amount of audience and can be helpful in reaching older people.
While people between the ages of 18 and 34 only watch on average 2 hours and 17 minutes of TV per day, those over 35 spend 5 hours and 54 minutes in front of the TV on a daily basis, according to a Nielsen study. In fact, 54% of this group of people consider TV ads to be an effective communication tactic for a brand, according to Horowitz.
The cost of advertising on television depends on many factors. As with radio, the channel’s rating, ad duration, time, etc. are taken into account. However, there is no doubt that it is one of the most expensive, since according to Fit Small Business, a company can spend on average $115,000 for 30-second ad broadcasts.
Social media and its Advertisements costs
Perhaps social networks are the means to advertise that has had the most growth in recent years. According to a study by Hootsuite and We Are Social, in 2017 there were 3 billion users on these platforms; however, by the end of 2019 the figure increased to almost 3.6 billion, which is equivalent to more than 46% of the world’s population.
Now, in terms of advertising, there are many ways to promote your company or product on social networks. From photos and videos that you upload to your business account (totally free) to paid ads. In the case of the latter, the cost may vary depending on the social network in which you want to disseminate it and the payment method.
In the case of the first aspect, surely you know that there are many social networks in the world. Each of them has characteristics that differentiate them from each other and that, depending on your objectives, may or may not be very useful.
For example, if you sell products aimed at the male audience, you may be more interested in promoting yourself on Facebook and Twitter, because according to Statista, men represent 56% and 82% of the users of these networks, respectively. On the other hand, if you are looking to attract the female audience, your best options may be Snapchat and Instagram. According to Statista, women represent 61% and 50.9% of the users of these two platforms.
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