How to Decide on the Best Advertising Media for You

This chapter discusses Advertising Media Planning. A wise man once said, "The person who saves money by not advertising is like the man who stops the clock to save time." In today's fast-paced, high-tech age, businesses have to use some form of advertising to make prospects aware of their products and services.

Even a famous company like Coca-Cola continually spends money on media advertising to support recognition of their products. Last year Coca-Cola spent more than $150 million to keep its name in the forefront of the publics eye. So the question isn't whether or not you can afford to advertise, you simply must if you want your business to succeed.

Some questions you should consider before buying ads are:

1. What marketing media is the best to use?

2. How important is creativity?

3. Is there a way to buy space and time that will stretch my advertising budget?

When it comes to advertising, a lot of people really don't know what they want, where to get it or what to do with it after they have it. This guide will help you learn to determine what type of advertising media is best for you, and learn to identify guidelines you can use to obtain the advertising exposure you need. It will help you identify ways to make your advertising more cost efficient.

Advertising is an investment in your business's future. And like any investment, it's important to find out as much as you can before you make a decision. You'll be able to use this guide as a reliable reference tool often in the months and years to come.

NEWSPAPER MEDIA ADVERTISING

Every advertising medium has characteristics that give it natural advantages and limitations. As you look through your newspaper(s), you'll notice some businesses that advertise regularly. Observe who they are and how they advertise their products and services. More than likely, their advertising investment is working if it's selling!

Some Advantages in Newspaper Media Advertising

Almost every home receives a newspaper, either by newsstand or home delivery. Reading the newspaper is a habit for most families. And, there is something for everybody: sports, comics, crosswords, news, classifieds, etc. You can reach certain types of people by placing your ad in different sections of the paper. People expect advertising in the newspaper. In fact, many people buy the paper just to read the ads from the supermarket, movies or department stores.

Unlike advertising on TV and radio, advertising in the newspaper can be examined at your leisure. A newspaper ad can contain details, such as prices and telephone numbers or coupons.

There are many advantages to advertising in the newspaper. From the advertiser's point-of-view, newspaper advertising can be convenient because production changes can be made quickly, if necessary, and you can often insert a new advertisement on short notice. Another advantage is the large variety of ad sizes newspaper advertising offers. Even though you may not have a lot of money in your budget, you can still place a series of small ads, without making a sacrifice.

Some Disadvantages with Newspaper Advertising

Advertising in the newspaper offers many advantages, but it is not without its inherent disadvantages, such as:

Newspapers usually are read once and stay in the house for just a day.

The print quality of newspapers isn't always the best, especially for photographs. So use simple artwork and line drawings for best results.

The page size of a newspaper is fairly large and small ads can look minuscule.

Your ad has to compete with other ads for the reader's attention.

You're not assured that every person who gets the newspaper will read your ad. They may not read the section you advertised in, or they may simply have skipped the page because there wasn't any interesting news on it.

How Should I Work with my Newspaper Representative?

Every newspaper has its own sales staff, and you're normally appointed your personal newspaper "Sales Representative." A newspaper sales rep can be very helpful. He or she can keep you posted on special sections or promotions that may apply to your business, but always keep in mind it is the sales rep's job to sell you advertising.

Your sales rep might say that the newspaper can layout any of your ads, pre-prepared or not. But these ads are assembly line products and are not often very creative or eye-catching. Consider using an artist or agency for your ads.

In addition, your sales rep can sometimes be instrumental in making sure your story or upcoming announcement "finds" the right reporter because the relationship between the advertising and editorial staff is chummier than most people think, even though they claim total anonymity.

Buying Newspaper Marketing Media Space

Newspaper Marketing Media Space advertising is sold by column and inch. You can determine the size ad you want just by looking in the newspaper in which you want to advertise. If you can't locate an ad that's the size you want, just measure the columns across and the inches down. For example, an ad that measures 3 columns across and 7 inches down would be a 21 inch ad. If the inch rate is $45.67, your ad would cost $959.07. In case your newspaper is still on the line rate system, remember there are 14 lines to an inch. So, if the line rate is $3.75, multiply it by 14 and you will have the cost of an inch rate. (the rate would be $45.50 an inch.)

Prior to opening your business you must decide upon the general Cost Amount you expect to maintain. Are you going to appeal to
individuals buying in the high, medium, or low price range? Your choice of location, appearance of your establishment, quality of
goods handled, and solutions to be offered will depend on the clients you would like to attract, and so will your prices.

After establishing this general price level, You're ready to cost Individual items. Generally, the price of an item must cover the
cost of the item, all other costs, plus a profit. Therefore, you will have to markup the thing by a certain amount to cover costs
and earn a profit. In a business which sells few things, total prices can readily be allocated to each item and a markup quickly
determined. With a variety of items, allocating costs and determining markup may need an accountant. In retail operations,
products are often marked up by 50 to 100 per cent or more simply to make a 5 percent to 10% gain!

Let's work through a markup illustration. Suppose your company sells 1 product, Merchandise A. The supplier sells Product A to you
for $5.00 each. You and your accountant determine the costs entailed in selling Merchandise A are $4.00 each item, and you also
want a $1 per item gain. What is your markup? Well, the selling price is: $5 and $4 and $1 or $10; the markup consequently is 5.
As a percent, it's 100%. So you have to markup Product A by 100 percent to make a 10% profit!

Many small business managers are interested in understanding what Industry markup standards are for a variety of products.
Wholesalers, distributors, trade associations and business research companies publish a huge variety of such ratios and business
statistics. They are useful as guidelines. Another ratio (along with the markup percentage) significant to small firms is the
Gross Margin Percentage.

The GMP is similar to your markup percentage but whereas markup Refers to the percent above the cost to you of each product that
you must set the selling cost so as to cover the other expenses and earn profits, the GMP indicates the association between sales
revenues minus the cost of the product, which is your gross margin, and your earnings earnings. Exactly what the GMP is telling
you is that your markup bears a certain relationship to your sales earnings. The markup percentage along with the GMP are
basically the exact same formula, with the markup referring to individual product pricing and GMP referring to this product prices
times the number of items sold (quantity ).

Maybe an illustration will clarify the point. Your firm sells Product Z. It costs you $.70 each and you choose to sell it for $1
each to cover costs and profit. Your markup is 43%. Now let up state you sold 10,000 Product Z's Last month thus producing $10,000
in earnings. Your price to purchase Product Z was 7000; your gross margin was $3,000 (revenues minus cost of products sold). This
is also your gross mark for your month's volume. Your GMP will be 30%. Both these percentages use the exact same primary numbers,
differing only in division. Both are utilized to establish a pricing method. And both are published and may be utilized as
guidelines for smaller firms starting out. Often managers decide what Gross Margin Percentage they will have to earn a profit and
just visit some printed Markup Table to discover the percent markup that correlates with that margin requirement.

While this discussion of pricing may appear, in some respects, to Be directed only to the pricing of retail product it could be
applied to other types of businesses too. For solutions the markup has to pay for administrative and selling costs as well as the
direct cost of doing a particular service. If you are manufacturing a product, the costs of direct labor, materials and supplies,
parts purchased from other concerns, special equipment and tools, plant overhead, administrative and selling expenses have to be
carefully anticipated. To compute a price per unit requires an estimate of the amount of components you plan to produce. Before
your factory gets too big it would be smart to consult an accountant about a cost accounting system.

Not all items are marked up from the average markup. Luxurious articles Will take more, staples . For instance, increased sales
volume from a lower-than-average markup on a certain item - a"loss leader" - may bring a greater gross profit unless the price is
lowered too much. Then the resulting increase in sales will not increase the total gross profit enough to compensate for the low
cost.

Sometimes you may wish to sell a certain item or service at a lower Markup so as to increase store visitors with the expectation
of increasing earnings of Regularly priced product or creating a large number of new service contracts. Competitors' prices will
also regulate your costs. You cannot market a Product if your competitor is greatly underselling you. These and other reasons Can
cause you to change your markup among items and solutions. There is no magic Formula that will work on every item or each service
all of the time. However, You should keep in mind the general average markup that you want to generate a Gain.

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