How much does an ad cost? A design, a brochure, a trade show exhibit? We’re always getting that question, particularly from small to mid-sized accounts. Then we ask, “What’s the budget?” and then the tennis match begins. Better question is, how much should an ad cost, or a design, or a brochure or a radio spot? Ads, brochures, self-mailers, tradeshow exhibits can have infinite price ranges. And no matter what price is offered, a less expensive alternative is always just a phone call away. And you can never forget that share of market will invariably follow share of voice.
Account supervisors ask, “what’s their budget” with the typical response being “they didn’t really have one.” Everyone has a budget – even if they don’t know it. More than a buck, less than a million; see…we’re closing in on it already.
You need to place a value on the expectations of the project. If it’s a print ad or a broadcast spot, the cost of production has to have some relationship to the size of the media buy. Buy a hundred-thousand dollar TV schedule and spend three-thousand to produce the spot, and you fail to get full value from the media buy. Buy a ten thousand dollar schedule and spend five thousand on production, you fail to get full value from the creative. Ten-to-one, schedule to media is a reasonably good place to start– to START.
How much media weight did you buy?
To make matters more complex, let’s layer on this additional thinking: You mention placing a value on the expectations of the project. Let’s also think about expectations from a sales point of view. (Says the sales promotion planner!) How much you should invest in the campaign should relate to how much you hope to gain from the promotion.
So, after you’ve spent $15,000 on a campaign, let’s look at the incremental sales you generated during the promotion period… did they deliver $15,000 or more to your bottom line? By tracking programs and results over a period of time, you should be able to find a spending level that delivers results most efficiently… when putting another $10,000 into the buy starts to show diminishing returns. The same holds true for promotion offers like coupons, sweepstakes prizes, etc. There comes a point when throwing more dollars into the offer stops paying off. Our goal is to offer just the right amount (the least we can) in order to stimulate the most sales.