Like most business owners, you're always looking for ways to save money and increase profits. One place you may not have thought to look is your marketing budget. Marketing is an essential part of running a successful business. It helps you reach new customers, increase brand awareness, and boost sales, but it can also be a significant drain on your bottom line if you're not careful. I've gone into companies to revamp their marketing, and I'm often shocked about how much marketing dollars are being spent ineffectively. I've seen a six-figure SEM budget with a -100% RIO. If you're questioning whether your marketing dollars are making a difference, it's time to reevaluate who's in charge and if they're able to justify their marketing costs. Here are some places to look when evaluating your marketing budget.
Print Advertising
Print advertising is one of the least effective—and most expensive—forms of marketing. Studies have shown that people are more likely to remember the ads they see on TV or online than the ones they see in magazines or newspapers. And even if people place your ad, there's no guarantee they'll take action. After all, who carries around a newspaper or magazine with them everywhere they go? So if you want to reach people where they are, print advertising is not the way to do it.
Direct Mail
Direct mail is another old-fashioned marketing tactic that has largely fallen by the wayside in recent years. That's because most people see it as nothing more than junk mail and trash it without even glancing at it. If you decide to use direct mail, be sure to target your audience carefully and make your offer irresistible so that people can open and read your message.
TV Advertising
TV advertising can be effective if done correctly. However, it can also be a massive waste of money if not done correctly. The key to TV advertising is targeting your audience accurately. You must make sure you're buying ad time on shows your target market watches. Otherwise, you're just wasting your money. TV advertising can be expensive, but it can be worth it if done right.
Online Advertising
SEM, or Search Engine Marketing, is one of the most popular paid advertising models. SEM can be an effective way to reach potential customers, but it can also be very costly. A recent study found that nearly 60% of marketing dollars spent on SEM are wasted. Google Ads, the largest SEM platform, has been criticized for being incredibly ineffective, with a click-through rate of less than 0.5%, and one study found that only 2.4% of Google ad clicks lead to sales. This is because many SEM campaigns are not properly targeted, resulting in ads being shown to people not interested in the product or service. In addition, SEM campaigns can often be hijacked by competitor advertisers, who bid on the same keywords in order to drive up costs. As a result, SEM can be a risky investment for businesses, and working with a knowledgeable Marketing Director with a proven track record of success is essential.
The bottom line is this: if your marketing budget isn't generating a healthy ROI, something needs to change. Don't continue throwing good money after bad; reevaluate your marketing strategy and ensure you're allocating your resources in the most efficient way possible. Your CFO will thank you—and so will your bottom line.
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