$56.8 billion wasted.  Is some of it yours?

Part 3:  Habitual waste.  

How much of the money spent on Advertising in America is wasted? John Wannamaker said half. Rex Biggs and Greg Stuart say 37.3%. Either way, it's way too much.

This week's posting, the third in a five-part series on advertising waste, covers one of the biggest sins of all – waste by habit.

  Original post date:  10/9/06


Habit-based programs. When someone says "What should we put in the Spring campaign?" it's a sure sign that the Spring campaign is a waste of money. Doing things because that's the way they've always been done is putting the cart before the horse. The objective isn't to do an ad. The ad is just one of many possible means to the real objective: profitable sales. An ad for the sake of an ad is a waste.

Avoid the pitfall: Zero base your plan. Determine what objectives need to be achieved, then allocate resources and build a program to achieve them. Don't start with a media plan then try to figure out how to use it.

Habitual media plans. The media universe is undergoing tectonic changes right now. No one has a clue what it will be like when – or if – it returns to equilibrium. There are only two givens:

It's not like it was a year ago.

It's not going to be like it is now next year.

The situation is a bit like a spin in a NASCAR race. Experienced drivers know they shouldn't turn away from the spinning car, but head right at it. Because the only sure thing is that it's not going to stay where it is.

Staying with the media you've used in the past after your target audience has moved on to other information/entertainment sources is guaranteed to waste your marketing budget.

Avoid the pitfall: Reevaluate media selection with every single plan.

The habitual ad. You know the one we mean. Old faithful. In retail it may be the "Salebration" in B2B "Quality companies have counted on for (insert your number here) years." Service industries have the "We care about you" ad.

Companies fall into the habit of using insipid ads because they think they're safe. But they're actually the most dangerous advertising of all. That's because nobody notices it. Companies that go with the expected ad or commercial, or the one least likely to offend anyone (including the competition) usually have invisible advertising. That's a very expensive waste of marketing communications dollars.

Avoid the pitfall: Break the habit and do a high profile ad or commercial or web site. It may make you a bit nervous. After all, all the other companies in your industry aren't doing ads, commercials or web sites just like yours. Which is why it can stand out and be effective.

The habitual year-end budget cut. Companies that cut ad spending when they aren't making their numbers often learn that things weren't really tough until the budgets were cut. The price of attracting a prospect isn't going to change. So companies that cut budget begin a self-fulfilling prophecy of failure:

They're not making their numbers, so they cut the budget.

They have fewer prospects, so they have fewer sales.

Fewer sales means they're missing the numbers by even more.

So they cut the budget again.

Avoid the pitfall:

  • Know the advertising investment    required to produce a sale.
  • Determine how many sales you need.
  • Budget to provide the sales you need to meet the company's objectives.
  • Explain to the budget cutters that sales cost $100 (or whatever) apiece. They can have as many as they want, at that price. Or they can cut the advertising budget which will cut sales.

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