Re: Determining Media Mix

From: Bruce Koren <bruce_at_citymarketing-sf.com>
Date: Thu 2 Dec 1999 23:53:18 -0800

SHARI (MILLER) MONNES WROTE:
> There has been a lot of hype recently about startups
> and dot coms spending huge portions of their budgets
> on branding and advertising (for example, see Forbes,
> Nov. 1, 1999, p. 60) using TRADITIONAL media,
> especially broadcast, including TV. I was wondering if
> anyone has any good advice or resources I could turn to
> in deciding how to allocate our year 2000 advertising
> budget effectively. We have been allocating between 30
> and 50% to online spending, but it seems that is not
> the norm. I am specifically looking for information in
> the small business arena. Any resources or information
> you have would be much appreciated. Thanks!

Shari,

Welcome to the club!
Small businesses are struggling to make sense out of
their media planning. Everywhere they turn, there's
another story about how important branding is and, just
look at what a great job Starbucks and Nike and Gap
(formerly known as, "the Gap.") are doing! And the
tempation is to take their tiny budgets and "do some
branding." Which means that they have even less budget
left for other media strategies that might produce a
higher ROI.

Reality Check: If you're a start-up moving into your
second round of funding, or an on-going enterprise with
millions to spend, go for it. What's wrong with
spending a few million dollars so your brand gains
share of mind? Nothing. Except it's not measurable.
And small businesses can spend their advertising and
marketing dollars on targeted media buys that are
measurable. Because when your budget is smaller,
you're always testing to see what gets the best return.
And we're moving into a phase of the
business/technology cycle where driving traffic to your
web site is golden...and testing is easy, immediate,
and accurate.

Here's a simple example from the online world: Should
you advertise with banners or Email? Well, if you want
to do branding, it's a great way to get your image and
messaging in front of an audience - animation, sound,
streaming video, pull-down menus ... wow! the
possibilities are endless. But banners don't work for
response-style ads. After all, when's the last time
you clicked on a banner? The commonly quoted response
rate for banner advertising is 1%. But we're not
looking for response; we're looking for image-building,
branding, name recognition. We want unique page views.

If we want response, we look at opt-in Email. Not
spam. Mailings to those who've registered for, and
have answered, "Yes," to the question, "Are you
interested in special offers and information on subject
X?" They asked for it, you give it to them, and
depending on the list, the offer, and the copy (and art
if it's an html Email), the response rates are quoted
as 12 - 15%. And I've heard of mailings to a customer
database garnering over 25% return.

Making the distinction between your branding strategy
and your direct sales strategy will help you see your
media spending in a clearer light. Every company has
it's own unique needs based on many conditions,
including their postion in the life cycle of the
business.

Bruce Koren
bruce_at_citymarketing-sf.com

City Marketing
415 398.0303
http://www.citymarketing-sf.com
City Marketing, your official creative
resource for the new millennium.




Received on Fri Dec 03 1999 - 01:53:18 CST