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Wednesday, Dec 6, 2023

Time to Review Where Ad Dollars Go

By Scott Harris A few years ago I was performing a communications audit for a large Japanese manufacturing company whose U.S. headquarters were in the San Fernando Valley. Early on we found that they had been spending over $100,000 per year to advertise in business-to-business magazines for a product line that had been sold three years earlier. They had spent over $300,000 promoting a product and a division that no longer existed. Just before the advertising manager was fired, she was asked how this could have occurred and her answer was painfully honest and, unfortunately, all too common: “Because we had always advertised with those magazines.” In light of the economic challenges and opportunities that we are all facing, it has never been more important to perform a communications audit. In its simplest terms, a communications audit is a review of every form of communication your company has with every stakeholder. Regular readers of this column will recall that the components of a strategic plan are the Goals, Audience, Message and Vehicles. The communications audit reviews your efforts over the past 12-24 months. How many different Vehicles did you use? Did you deliver the proper Message? Did you reach the correct Audience? And most important, did every one of your efforts move you closer to achieving your Goals? Many people limit their definition of Vehicles to “traditional” advertising. This can include advertising (print and electronic), direct mail, billboards, websites, trade shows, sell sheets and brochures. While not an exhaustive list, it certainly gives you an idea. However, communications opportunities also include areas not always considered “communications”: board meetings, public relations, news stories, blogs, social and experiential marketing, speaking engagements, industry rankings, etc. The goal of a comprehensive communications audit is to ensure that every dollar and hour invested is working optimally toward achieving your defined goals. For that to happen, you need to follow these steps: 1. Pull together a complete list of every marketing and communications effort over the past 12 months (24 is even better). 2. Assign a cost to each item, for both dollars and hours (executive and staff) invested. 3. Rank each project by the following criteria: Expense in dollars Expense in time Impact on achieving goals 4. Create a separate list of suggested projects, ones that have or should have been considered, but have not been implemented. Assign an expected cost in time and dollars and insert in the appropriate places on your rankings. 5. Create a budget for both dollars and hours and compare it to the lists above. It should be easy to keep cutting from the bottom until your list of projects matches your budget of dollars and hours. This is no time to be sentimental. If a project does not help you achieve your goals or takes a disproportionate amount of the budget (time or dollars) cut it. This isn’t about friends you’ve been working with forever, trade shows that you hate to miss or any other non-business reason for holding on to something that isn’t working (or isn’t working as well as something new would). On the other hand, you certainly want to consider continuity and consistency in your decision-making process. Do you get great placement or airtime because of a relationship, or strong PR coverage because of a media commitment? If so, that has to be factored into the decision. That’s why we have jobs, to use our judgment, as not all of these decisions are black and white but many of them are. When this process is completed, you will have a matrix of projects ranked by budget and effectiveness. You can now use this information to gauge all new project proposals. Will the new project be more effective than what we already have? Where will we find the resources in dollars and hours? You now have a strong, objective tool for making decisions both yes and no and keeping your overall strategic plan and tactical execution on target. Scott Harris is the owner of Mustang Marketing, a full-service marketing agency serving the San Fernando Valley for more than 20 years. You can reach Scott at Scott@MustangMktg.com or visit Mustang’s website at www.MustangMktg.com

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