The value of digital ads

The most frequently asked marketing question received from companies is: “How much should I be spending on digital marketing versus traditional advertising?” The answer … it depends.

The first step to answering this question is for a company to do a bit of data mining. When looking at a company’s customer data, they will begin to understand fundamental demographic data such as their customer’s age, gender, location, income levels and other pertinent pieces of information. Whatever makes up the lion’s share of the company’s revenue should be their primary demographic. This should be whom the company markets to.

Once the target demographic is defined, a little due diligence and logic comes into play. The internet is full of media statistics regarding your target demographic, such as what they like to do, what media platforms they utilize and how to target them.

It is also important to communicate the biggest stumbling block that any marketer will face in advertising, and the biggest mistake that is often made: marketing to themselves! The most difficult aspect of marketing is having the ability to step out of your own shoes and into those of your potential customers. This goes for media buys and creative content as well.

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Once the business has done their due diligence to find the medias that may work best, they must then consider their budget. Budgets are the most important component to any marketing campaign. The smaller the budget, the more one needs to hone in on a select few media platforms to get response. For example, if your budget is large enough to choose varying medias, then the company can hedge their risk by selecting multiple medias and measure them accordingly. However, if the budget is smaller, the company must choose only a few options, and it is imperative that they are the right ones. Additionally, certain medias need a minimum spend to gain a response, such as radio TV advertisements. With this platform, one may need about $20,000 to make enough of a splash. Yet imagine what a company could do with $20,000 on social media?

Another important point is to address the goal of the campaign. Some companies state that they aim to increase their “image” or “brand,” but this still comes down to earning more revenue. Once the target demographic is defined and the medias are agreed upon, a percentage should be assigned to each platform. The most important part here is to look at the stats and examine how the target demographic is spending their time. Again, the cost for each media platform should be examined and analyzed based upon either a cost per rating point for traditional media or a cost per thousand CPM for digital buys. This will give a company an approximate value for each platform based on their offerings; therefore, allowing the company to pursue the best offering.

Successful businesses know with exactness the wants, wishes and buying behaviors of their target demographic. They have analyzed the size of the market or the number of potential customers that fit the target profile. They not only grasp what their customers watch, read and hear, but they know how to creatively address them. Knowing a customer to this depth is one of the key characteristics of highly successful business leaders. •

Blair Fish is the CEO and president of Fish Advertising in East Greenwich.

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