Tag Cautionary Tales

A tempting offer

A lot of small businesses have access to co-op advertising. If you sell any national brands, then you know what I’m talking about. Many of these brands have ads ready for use. All you have to do is put your logo, or your store name if you haven’t got a logo, into the space provided, and the manufacturer will pay a good portion of the cost to run the ad. Sounds great, doesn’t it?

Not so fast, though. There’s a catch. You see, if you take a look at that ad, you’ll find that it isn’t an advertisement for your store or business. It’s an advertisement for whatever product or brand you are co-operating with in your advertising. Typically, you get a slender portion of the bottom of the ad or the last five-seconds of the TV spot. The rest of the time or space is devoted solely to them. You get only a sliver.

As a small business owner, there are two questions you need to ask yourself when it comes to co-op advertising:

1. What am I getting for my money?

2. How much do I really benefit from this?

Let’s look at each of these questions, and see if co-op is really as good of a deal as you think.

What am I getting for my money?

When I first started out, I made a lot of TV spots. One of the things you run into with co-op ads is the taggable spot. For those who have no experience or knowledge of co-op advertising but are reading anyway, here’s a brief description: a taggable spot is usually a 30-second TV spot that has the last 5-seconds or so blank so you can add your store’s location and contact information. Sometimes you’ll here a narrator say, “Available at these fine locations” or something like that, but, thankfully, not always.

Anyway, often a furniture or jewelry store or perhaps an A/C & heating company will run one of these taggable ads. They reason they do is the same reason you might be tempted to do it: the manufacturer will pay for half of the airtime.

Let’s do the math.

In a 30-second TV spot, the manufacturer gets 25 seconds, you get 5 seconds. You get 1/6 of the airtime, the manufacturer gets 5/6 of it. And you get to pay for half of that airtime. Some deal, huh?

It works the same for a radio spot or a newspaper ad, only with a newspaper we’re talking about physical space instead of time.

Now if your manufacturer is paying for most or all of the airtime, then you might reconsider, but only after you’ve answered the second question.

How much do I really benefit from this?

While there are notable exceptions like Rolex, most manufacturers don’t give their partners an exclusive sales agreement. La-Z-Boy recliners can be found in a lot of furniture stores, even in the same area. The manufacturer will make money regardless of where their product is bought. Getting their name out there benefits them even if you never make a single sale.

You see, any ad your manufacturer runs also benefits any of your competitors that carries that same brand. Yeah, because you’re paying for it, you get your name attached to the ad, albeit ever so briefly. But what is more likely to be remembered about the ad, the vast majority of it concerning the manufacturer, or the sliver at the end about you? Who benefits the most?

If you have an exclusive arrangement, co-op advertising can help stretch your ad budget. But the bottom line is this: co-op does nothing to bolster your brand or identity in your marketplace. Even if you have that exclusive arrangement.

An apple for your thoughts

Learn a lesson from the big boys. Home Depot and Lowe’s both carry famous national brands, some of which are exclusively found only in one store or the other. Do they spend a lot of time talking about the brands they carry in their advertising, or do they concentrate on what makes them unique from their competitor?

Don’t think that you can’t do the same because you don’t have the advertising budget of Home Depot or Lowe’s. The money you would spend on a co-op advertising campaign could be spent on a campaign that would exclusively promote your company’s unique way of doing business. It’s simply a decision about how to best use your ad budget.

Don’t fall for co-op. It costs more than you think.

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There are some things that advertising won’t fix

When a business advertises, they expect an increase in sales. After all, that’s why they advertised in the first place. But as an ad guy, I know that there’s a lot more to increasing your sales than simply making a great ad. Your advertising can bring people into your store or make your phone ring, but that’s about it. What people find when they come in or call makes all the difference in the world.

If your sales people are rude and run people off, or if the quality of your product is not up to par, then your sales will not increase. And that’s not your advertising’s fault. In fact, advertising will only contribute to your decline. William Bernbach, the man who came up with some of the greatest ad campaigns of the 20th century, said it best,

“A great ad campaign will make a bad product fail faster. It will get more people to know it’s bad.”

Advertising works. It will work either for you or against you, but it will work.

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The Media Plan That Fell Apart

I had a client once that sold furniture. They had two stores in two different cities. They hired me to help them with their advertising soon after they opened their second store.

That second store had a slight problem. It was literally located on the wrong side of town. There was a freeway that ran through town, and most of the economic growth was west of that freeway. To the east of the freeway, businesses were shutting down and moving where the action was.

You know the first rule of real estate? Location, location, location! This store didn’t have it. Very few people drove by their location. That’s a problem. Because few people travelled east of the freeway, the people of that city didn’t know there was a new furniture store in town.

That’s where I came in.

I recommended a two-pronged approach: cable television to show people their product, and billboards to direct people to their store.

They sold really nice furniture, and people needed to see that. People also needed to know that they were not very far away even though they were on “the road less travelled.”

They didn’t have a huge budget, and I was an unknown element to them. So we started off lightly by going in with cable with the understanding that billboards would be added later if they saw results.

And results they got. After about a year, we added billboards to the mix. One billboard in particular was in a great location on the freeway south of town — the majority of residents worked and shopped south of town, so everyone saw that billboard when they drove home on a daily basis.

Then things really started to take off.  Sales were way up. Things were good. Then it happened.

The client was spending a lot on advertising. They needed to because there was no benefit from their lousy location. But still, their other store, located in a different city, didn’t have to spend as much on advertising. Never mind that the other store had a fantastic location.

Anyway, they decided to run a test to see which ads were working and which ads were not. That’s not a bad thing, but they never consulted with me and ended up going about it all wrong.

They decided to ask each customer at the time of purchase one question: “Which ad of ours brought you to our store?”

Note that they didn’t ask where the customer sees their ads.

The problem with their question is that the customer isn’t going to know which ad they responded to. The fact is that the customer is responding to all of the ads they’ve seen from that client. The cable ads convinced them that the quality and selection was worth looking into. The billboards reminded them that the client was close by, just a little east of the freeway.

So how did their customers answer the question? Which ad did they mention?

One billboard overwhelmingly led the poll. You got it: the billboard south of town that everyone had to drive past every single day.

So what did the client do? They cancelled all the rest of their advertising except for that one billboard.

I tried to tell them that their cable and their billboards worked together. They said that most everyone remembered that one billboard, but not their other ads. I reminded them that everyone drove past that billboard on their way to the store, so it was fresh on their minds. But they didn’t listen.

I warned them that their sales would decrease once people were no longer being shown the quality of their selection. The billboard only told people where the selection could be found. They didn’t believe me.

Several months later, the client informed me that their sales were down by an alarming amount. Interestingly, they didn’t want to re-implement their media strategy that had been working, they just wanted to change out their billboard artwork. “We must need something new up there, we don’t seem to be getting the same results we were before.”

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