Join the network

Is advertising dead? Long live advertising!

Business Life 26-02-2017

With the surge in popularity of marketing through social media and online formats, one might be forgiven for believing that the only way to get your brand the coverage it deserves is through websites. However, as Andrew Stone finds out, traditional advertising still has some way to go before the party is over.

The Internet has killed traditional advertising. Traditional ads can’t be measured.

Young people hate being sold to. Everything is now all about word of mouth and it’s all free anyway.

That, at least, is the received wisdom you’ll hear these days when it comes to marketing your products or services or building a brand. And there is no doubt that the advent of the internet and social media have changed the game.

They have challenged traditional advertising and massively added to the armoury or marketing weapons that businesses can use.

But reports of the death of advertising have been greatly exaggerated and traditional advertising mediums still have a powerful reach.

A report from US advertising company MRI, for instance, found that magazines hold the biggest influence over consumers (61%).

It’s counterintuitive to think that online advertising is not always the most effective medium but print has a tangibility that appeals to many consumers, giving it longer life as they are passed on to new readers, says US marketing firm Mc Daniels.

“Magazines offer possibilities for incisive targeting, by geography, hobby, profession, interest and more, as well as high-quality advertising thanks to high- quality production.

Tendencies toward keeping magazines as a reference, keep- sake or simply for future reading pleasure give them an extended shelf life hard to match,” it states.

This is all backed up by research from software company Adobe’s recent Click Here: State of Online Advertising study, which found consumers still prefer traditional print, TV and outdoor advertising to newer online channels.

Print magazines were voted the most popular advertising medium (39% of the poll) in the UK, ahead of TV ads (23%) and websites (12%).

The good news for entrepreneurs and owner or managers of growing businesses is that they are likely to get more from their advertising spend whether online, in print or broadcast than larger rivals.

A 2013 report conducted for the UK Advertising Association found that spending an additional £1 on advertising would benefit an SME nearly eight times as much relative to its size as an equivalent £1 spent by a larger business.

In fact, a lack of investment in advertising could even be holding SMEs back. They account for only 18% of total UK advertising spend, even though they contribute nearly 40% of UK turnover.

The report suggested that using advertising could help to raise UK SME exports to the EU and add £40bn to the economy.

“The research strongly suggests that small high-growth-potential businesses are under investing,” says Ian Barber a spokesman for the Advertising Association.

The survey found that SMEs which advertise are more likely to achieve growth, yet many are understandably held back by concerns over cost and the prospect of getting a return on investment. Two- thirds (67%) of SMEs which do not advertise believe that advertising is “too expensive” and additionally, 66% believe it is “financially risky”.

Fewer than one-third of SMEs invest in any form of advertising and even among businesses with more than £10m turnover, fewer than one in two (46%) currently advertise.

Yet the figures suggest that those that do invest are benefitting. High-growth  SMEs are more likely to advertise and 64% of SMEs that have advertised say it was a success, the survey found.

It suggests that companies which simply try to market their services to customers via social media are missing out. While it is true that social media offers easy ways to reach customers easily and inexpensively, this is nothing new, adds Ian Barber.

“There have always been free media opportunities using boards, company vehicles, shop windows.”

If free media is nothing new and yet advertising still worked in the days before digital media that suggests it still has its place now. In fact, it can offer even better value today, says Ian.

“What is different today is the cost of advertising. The entry cost into a more strategic paid- for ad campaign is lower than it used to be, even for mainstream media like radio and TV, while the cost of online advertising is extremely low and extremely targeted”.

Many high-growth SMEs have had success with low-cost and local advertising including radio and newspapers which offer an opportunity to attract a regionally specific audience, or online pay-per-click services that allow them to monitor their advertising closely.

Advertising creates and sustains relationships between consumers and companies. It informs consumers about existing products and innovations, helping the best ideas, products and brands to succeed.

It helps companies to communicate their prices and products, allowing people to make informed choices about who they buy from and at what price.

It also still plays an important role in helping businesses build their brands and differentiate their products. It can also play a key role for SMEs looking to enter new overseas markets, in particular, supporting market entry and helping to build larger market shares.

So how do businesses decide whether to advertise and how do they make the most of their advertising when they do spend on it? The key is to create a coherent and considered plan, says the Advertising Associations Ian Barber.

SMEs fail to extract the minimum value from their campaigns when they are designing each advert in isolation and where they don’t measure the results of their advertising.

Failing to do this makes it more difficult for them to calculate an accurate return on investment and harder for them to improve and refine their campaigns over time.

Among SMEs that advertise, the ones that achieve the best results are the ones that use multiple advertising channels and which develop a structured campaign, rather than relying on an occasional advert or just using one channel. The 64% of all SMEs that believe their advertising has been a success rises to 83% for those who have a structured multi-channel campaign.

“The report shows that when they get advice and put in place multi-channel campaigns, their advertising is more effective,” says Ian.

Deciding whether to spend on advertising and how to do it must also be informed by a wider and carefully thought out marketing strategy, says marketing and brand expert Paul Bay, of consultancy Citizen Bay.

“There will always be a place for the advertising message. The power of effective advertising is in the way it can help to trigger a rethinking about a particular brand and build awareness rapidly but it has to justify itself more than ever,” says Paul.

“People have the power to seek information about products and services, pricing promotions and quality. The old style business funnel from awareness to closing a sale is not really around anymore. More than ever before it is about what people say about your product online, so advertising has to be challenged at more levels now.”

Each advertising medium has to be challenged about the benefits it will offer. Magazines must demonstrate knowledge of how their readers react to the ads in them and websites must be able to justify what their ads will return.

But before any marketing activity takes place, and especially before embarking on an ad campaign, it must be underpinned by some research on your customers that offers you insights about them, explains Paul.

Finding out what people are saying to each other about your sector, products or competitors can be free, relatively simple and will offer a wealth of insights.

“Analysing what people are saying to each other gives you an amazing insight into what makes people tick. Start with customer insights whether that’s from people coming into the shop, from your sales team or in online surveys.” advises Paul.

“They will give you amazing nuggets from that you can work out the best forms of reaching them. It’s all about building long- term customer relationships and revenues. Focus on that bit and everything else will fall into place.”

Once you’ve done this, getting the mix of “earned, owned and paid-for” marketing is important. Owned marketing is the effort you put into your own assets including your website and physical space- shop windows and displays, earned marketing is the conversations others are having about your product between themselves, and paid for advertising.

Keep trying, testing and measuring to find the right mix of these three for your business, says Paul. “For one company Facebook might work, for another it will be an old-school print ad. You only find out by testing.”

Measure the response to the campaign in terms of hard numbers (classic media metrics like the number of website clicks it generated) but also people’s emotional response, says Paul. Did they like it? Did it make them rethink your business? You can pick that up in the social space or when your sales teams speak to customers.

Having a common sense attention to detail will also help you get the most from an ad campaign, says Paul. Think about the journey you want a customer to take when they respond to an ad and make it an easy one. Make sure web links on the ad take customers to the relevant page (which is often not your home page).

Make ads simple and uncluttered. Effective use of things like font and colour will aid clarity, says Paul. “Simplicity works and all too often we over-complicate things.”

Making a real impact with investing
Business Life 04-07-2018

Minerva Group’s Sailesh Navsaria explains how within a generation, all investment will be Impact Investing. The term ‘Impact Investing’ is becoming more widely known and refers to investments made with the. MORE

Looking to invest in commercial property?
Business Life 20-05-2018

Nilesh Patel Director of The Prideview Group gives AWM his expert insight into the world of off-market commercial property investment. London-based Nilesh Patel gives us the inside scoop into the world. MORE

Habits of self-made Millionaires
Business Life 20-05-2018

What are the daily rituals of super-successful people? AWM speaks to millionaires to find out their rarely revealed secrets to success. Many millionaires aren’t born; they’re self-made. Becoming a self-made millionaire. MORE

X
Want to see more?
Register for FREE with a few details to continue reading.