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advertising cost

Discussion in 'General Entrepreneur Discussion' started by nomadjanet, Sep 17, 2007.

  1. nomadjanet
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    nomadjanet Contributor

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    Well here we are with a pretty good little business. Our advertising budget for last year was 90k; we are hoping to sell the same amount of goods & services this year with less advertising. The Yellow Pages people are insane and every year they attempt to rape & pillage people in our sector. A 3/4 page ad in one section and a 1/4 page ad in the other section would be 56k this year, that does not leave much for other forms of advertising including keeping in touch with existing clients. So this year I jumped ship on the YP people we are spending less than 25k downsizing both our ads. This is a big deal for me, since I have made the deal to downsize, am I losing momentum? Will we stop attracting new clients? Even though we have tracked our client sources and the numbers tell me it is the right thing to do I am second guessing myself at this point.
    We are buying a little more internet presence and looking to upgrade the internet YP as soon as they get it worked up. I know from past experience what we can get from direct mail but I have never used radio & TV to any advantage. Anyone out there familiar with these mediums & have you had much luck?
     
  2. M-M
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    M-M New Contributor

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    Everything I've read and heard from other business owners indicates that the YP are dying. Most everything is online now. Some industries still work though, so it depends.
     
  3. randallg99
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    randallg99 Bronze Contributor

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    Janet,

    Firstly, I am in retail, so my opinion might be taken with a grain of salt.

    Speaking from experience, I have found several problems with the YP. M-M mentioned the biggest competitor to the YP which is the internet.

    My office staff and myself use google search among others to find local merchants and/or phone numbers for our needs. We rarely ever use the YP for our own personal needs.

    Another dilemma is that there are now 2 considerable competitors to the YP: the Yellow Book and a red book (not sure who prints this), so should all business owners invest in all of the books?

    The costs have also dramatically increased, as your post mentioned. Negotiating with the YP has become a tiring process that I basically asked them to leave my office after I gave them my offer and they kept beating around the bush. When I asked for hard evidence that the YP was still viable, they produced some BS pieces of paper with their skewed stats...

    Side note- there are some advertising companies that specialize in creating ads that can help reduce the costs. YP makes their money from size and color while this adv company actually reduces the size and eliminates the color while making the ad still attractive.

    I believe you made the right move, Janet. I have not seen any detrimental effects from not using the YP at all.

    The same applies for ROP (newspaper). I have all but eliminated all forms of advertising in newspaper except for one group of monthly publications.

    My most productive forms of advertising is direct mail with my existing clientele mailing list and circulars.

    >>> I have never used radio & TV to any advantage. Anyone out there familiar with these mediums & have you had much luck?<<<

    I have used both and I am not sure how saturated your market is. In my market, I am contending with NY, Phila and NJ stations. Radio is also contending with satellite radio while Cable TV and DVR has minimized TVs effects.

    At first glance, we should ask about your best customers.

    1. what does your best customer watch? what channels? what time?
    2. what does your best customer listen to? what channels? what time?

    the most important thing regarding TV and radio is that consistency is extremely important but expensive. A one week campaign with solid repetition spread over several stations has cost me over 10k for the week. Depending on the type of campaign, you will probably want to stick to what has already worked most effectively.

    word of mouth has been most effective for our stores and we have been developing a plan to implement it this past week.

    Good luck
     
  4. nomadjanet
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    nomadjanet Contributor

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    Thanks for the input Randall, I know it is the right move I just need to stand firm. The YP people are so hard sell they brought the VP of sales down to arm twist me, I almost had to physicaly throw him out. Our staff has tracked our sales and over 60% of sales come from repeat & referral business. Out of the remaining sales a great deal of that comes from neighborhood newsletters published for the homeowners organizations. We are seeing more people finding us on the internet and we are purchasing a banner on the YP that is tied to our mysa.com to improve the exposure.
    Thanks again,
    Janet
     
  5. MJ DeMarco
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    MJ DeMarco Raving Lunatic Staff Member Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR Summit Attendee

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    Janet what is your line of business? I'm surprised the YellowPages can actually still dictate outrageous price increases. Dependent on your industry, most advertising is moving online in lieu of YellowPage ads. I can't remember the last time I used the YP's. Its a dying medium being strangled by the internet -- much like stockbrokers and travel agents are dying breeds.

    Old line media is dying:
    ---------------------
    Newspapers
    Magazines
    YellowPages

    New media
    -----------
    Cable TV niche advertising
    Internet media (PPC, Contextual ads, PPA, Pay-per-call)
    *Smart* internet directorys (replacing YellowPages)

    If your industry lends well to TV, you might want to try TV advertising - SpotRunner.com sells TV space and even helps with commercial production. I've never used them so I can't tell you the results. Also, Google is starting with print and radio ads.

    Again, much of this depends on your industry.
     
  6. Shawn
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    Shawn PARKED

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    I used to do tons of YP ads for one of my biz's and yanked them all 2 years ago. Their profit margin on ads is a joke. Invest that money on internet marketing and you'll be so happy you did. For the most part, no one except old people and people without internet use the yp. Are those customers you want? Everything is internet.
     
    MJ DeMarco likes this.
  7. nomadjanet
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    nomadjanet Contributor

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    We have a home services business mostly plumbing but other services also. Thanks for the link to SpotRunner I will take a peak and see if it is a fit. Yes I know that the online thing will pay off it's just hard to change, you know like who moved my cheese?
    Janet
     

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