Every business buys advertising media. But how many are able to get 50-200% more bang for each buck they spend? If you aren't sure, you should definitely read "David vs. Goliath: Guerrilla Media Buying for Small Business, a New Way to Win." Here is a question for the Media Guerrilla.
Question for the Media Guerrilla—
"I own an auto dealership in a northern suburb of a top 10 market. A salesman for the #1 news-talk radio station sold me a $50,000+ 26 week sponsorship which was supposed to bring a lot of new traffic to my store. Traffic and sales did not pick up much beyond what we would have had anyway. Was this buy a mistake?"
Media Guerrilla Answer--
First, in terms of ROI-- if your Retail Trading Area is typical of most dealers, you probably do 70-80% of your business with customers who live within five miles of your dealership. This compares to about 5% of the station’s audience falling into your marketing area; the rest of the audience is reaching consumers who-- because they live so far away-- have a lower probability of visiting your dealership.
This means that he value of the exposure you received in your Retail Trading Area was about $2,500, not $50,000. Unfortunately this also means that up to 95% ( $47,500 ) of your budget may have been wasted. It also means that if your average advertising cost per sale is $250, the cost of this sponsorship drove your cost per sale up to $5,000, probably a money losing proposition.
Aside from ROI, there are other cautionary flags with this buy. You should also keep in mind that :
1 ) Even the largest radio stations generate small audiences/ratings ( radio audience is divided among over 10,000 radio stations in the USA! );
2 ) Because people listen to only a few favorite stations, this sponsorship reaches the same people over and over again. Reaching less than 10% of prospective purchasers by a station is clearly a problem if your objective is to raise awareness to 30, 40, 50% or more;
3 ) What is the cost efficiency of this buy compared to buys on other radio stations in the market ( or other media );
4 ) Given that radio is a “:background medium,” and you are looking for specific message communication--
5 ) In a similar manner, you need to analyze to he cost effectiveness of your other media investments, e.g., where you pay for the audience generated outside your trading area?
Information is Power--
Read “David vs. Goliath: Guerrilla Media Buying for Small Business, A New Way to Win.” This book will help you address important media buying decisions like this on your own! Learn more at:
www.amazon.com/
Contact:
Ronald Geskey
2020:Marketing Communications LLC
Auburn Hills, MI 48326
email: marketing2020@
