We often talk about the power of advertising, but what does it really mean to U.S. companies? According to Advertising Age, a magazine that analyzes data on the industry, there are presently 36 businesses in America that spend over $1 billion a year on ads. The list includes familiar names like McDonald's and General Motors, as well as more recent additions like Google and Apple Inc. These global corporations spend all those zeros on advertising each year in order to attract new customers and improve sales. But does it really work?
The proof, as they often say, is in the pudding. U.S. companies spend about 70 billion bucks per annum on television ads alone. They also invest billions more in radio, newspaper, and now internet ads. They do this because they know that if a particular advertising campaign resonates with the public, it can boost sales in no time.
The advertising industry
Madison Avenue is a famous metonymy that is used to describe the U.S. advertising Industry as a whole, since many of these firms started out on Madison Avenue, in New York City. Today, most of these firms employ highly educated and experienced admen who develop marketing strategies for their many clients. Because their job is a difficult one, they are often well compensation for their toil. The average mid-career pay for a marketing graduate is over $77,000, well above the average college grad.
What do they do?
As we mentioned, their primary responsibility is to develop effective marketing strategies, which is a fancy way of saying they get the most bang for their clients' bucks by helping them reach more customers for less. To do so, they must find the media that best suits their clients' needs, whether radio, television, print, online ads, or some combination of the aforementioned. Because no single marketing strategy is effective for every company, they must be tailored to meet the needs of each and every client. With that in mind, we will discuss 5 tips that can help any adman develop an effective marketing strategy.
1. Know the market
As any business owner can attest, getting to know the needs of customers is imperative, since increasing sales is the ultimate goal. In economic terms, that would be the micro perspective, because it looks at things on a local, personal level. Admen, on the other hand, must take the large or macro perspective. They must examine an entire industry to determine what makes some competitors successful and others bit players. To do so, they must learn about the size of the market, its customer base, and the market leaders. Only then will they be able to divine what customers are really looking for.
2. Find your target audience
In any given industry, there are companies that appeal to different types of customers, whether based on age, cultural, or gender differences. Locating this key or target market is crucial for businesses of all sizes, since it will be their primary customer base. An adman must get to know this group intimately if he hopes to sell to them. He must find out where they shop, how much they typically spend, and what they like to buy.
3. Identify your position in the market
Marketing agencies use terms like leader, follower, challenger, and niche player to describe the size of competitors in any given industry or market. As we mentioned at the outset, there are companies that spend billions of dollars on advertising each year, and they are invariably the market leaders. Every other competitor in that market generally spends significantly less, either because they don't have the advertising budget to do so or because it would be a wasteful.
For example, a niche player in any market is a competitor that has carved out a small slice of that market. Most do quite well selling goods and/or services to their target market. These companies have no need for massive advertising campaigns to try to sell themselves to everyone. In fact, that would probably undermine their efforts, since their profits are often based on the fact that they're small companies that provide superior customer service
. Once they branch out and become larger, they stand a very real chance of losing their primary customer base or target market.
4. Set goals
Because almost everything can be measured and quantified in an instant these days, the marketing industry of today is far more competitive and responsive than it was in the past. The modern adman must set goals for each marketing campaign he approves and then make the necessary adjustments if it fails to bear fruit. For example, if he purchases a Google Ad, he might be looking for an increase in traffic to his client's website of at least 10 percent in a certain period of time. If the ad fails to generate that increase, he may have to revise his overall marketing strategy.
Of course, in order to set said goals, the adman must be aware of industry averages. He must know, for instance, how many additional guests a Google Ad should drive to the average website. He must know the same for every other advertising media if he hopes to develop an effective marketing strategy.
5. Create a marketing budget
The overwhelming majority of businesses in America, about 99 percent, are small businesses. As such, most do not have big marketing budgets. A good adman will take that fact into consideration whenever he works with a client that is operating on a shoestring budget. He will not try to convince the business owner to get in over his head with ad campaigns that are wastrel or overly optimistic. Instead, he will do the best he can with what he has. At the very least, he will work to identify his client's target audience and then invest in cost-effective ways to communicate with them. More often than not, this will involve inexpensive new advertising methods such as social marketing or online ads.