Small businesses might be surprised to hear they can lower their advertising budget, even with the price of ads increasing across the board. Almost every medium – television, radio, newspapers, internet, – has been inflating their charges, but business owners who are crafty with their marketing can cut their marketing allocation while still remaining effective in advertising.
Paying more for ad-space
The recent boom in digital media has unleashed the marketing potential of many new forms, but it has also fragmented audiences. Because U.S. population has remained stable in comparison to the explosive growth of media, networks today have fewer followers than they did 30 years ago.
Steve McKee, president of McKee Wallwork & Company, recently discussed this phenomenon in an article for Bloomberg Businessweek. Having fewer eyes and ears on any given medium, McKee says, “gives marketers the privilege of writing bigger checks to reach smaller audiences.” Cleverly, he invents a term for this combination of advertising inflation and audience fragmentation: “Fragflation”.
McKee’s firm discovered that 4 to 6 percent of an annual marketing budget could be lost to fragflation, enough to leave a mark on a small business’ budget.
Paying more to get less is certainly something businesses would like to avoid. But if they want to place an ad on somebody else’s network, there isn’t any way around it, unless they avoid costly media networks altogether.
Forging digital networks
“You can achieve greater success by targeting fewer people more convincingly than trying to reach as many as possible,” explains McKee. One can appeal to a target audience and do it cheaply by creating their own network for consumers to follow.
Having a social media page with regular updates is a ready-made network on which to advertise. Posting promotions, contests, news stories, links to fun content and other updates keeps up a network of interested consumers. Businesses can then drop lines about their new products or services without paying a dime for the space.
As a whole, small businesses have yet to embrace digital networks. Despite the medium’s unprecedented growth, many small businesses are still relying on snail mail and newspapers to market their retail shops, restaurants, and services, Adweek reports. A 2013 survey by The Boston Consulting Group revealed that small businesses spend only 3 percent of their advertising budget online.
Why so little involvement in the new frontier? It’s likely due to a fear of the unknown – or a fear of getting ripped off, John Rose, a senior partner at BCG, explains:
“The small- to medium-enterprise community faces a myriad of digital marketing, digital advertising choices,” Rose says. “It’s pretty hard for them to winnow their way through the 20 to 40 unsolicited requests they get a month to use digital marketing product A versus digital marketing product B.”
But if small businesses are willing to remain patient and dedicated to building an online network, they may be able to avoid writing a check for web advertising. McKee believes that a company’s personal network is a counterpoint to fragflation. It may not cut back on ad costs entirely, but it can at least offset the increasing charges.
Small businesses wishing to counteract the rising costs of ads can turn to a small business lender. National Funding offers a variety of financing services that can help you invest in new services.