Small business advertising is easy as pie. Or, at least the basics are. Being creative, memorable and fun, well, that’s another story. Especially if your small business has the personality of Lurch from the Addams Family.
What's The Advertising Freqency Kenneth? Image Copyright Virgin and REM.
Advertising A Small Business Shouldn’t Be A Blank Check
It makes me sad. Many small business owners and large businesses for that matter, view advertising rather naively, taking the stance, “hey, let’s throw a bunch of money at advertising without thinking about what we’re doing!” Will you get results with this approach? Sure! But, your small business advertising will be less costly and more effective when you stop blindly slinging dollar bills at everything that moves, and start using advertising reach and advertising frequency to guide your decision making.
What Is Advertising Reach?
Small business advertising reach is one of the most basic advertising terminology you’ll encounter. Advertising reach refers to the amount of people that your advertisement can reach, or be seen, viewed, read or heard by. Reach doesn’t mean the amount of people who did see your advertisement, but simply the potential audience that could be exposed to it.
The following are two examples of small business advertising reach. Let’s say you want to run a radio commercial for your small business on the morning news program with a reach of 120,000 people. That means that the radio station (or an independent auditor) has calculated the listening audience for the morning news program at 120k people. The same applies for something like a magazine, where the reach would be the total circulation including newsstand sales and paid subscriptions.
What’s The Advertising Frequency Kenneth?
Borrowing a line from R.E.M.’s famous song, “what’s the frequency Kenneth?” Frequency is advertising terminology that sounds complex but is very simple. Advertising frequency simply refers to the number of times you expose individuals to your advertisement. So, for example, if you run your small business advertising on Google five times, the frequency for your advertisement is five.
More importantly, advertising frequency is used to determine how many times a person must be exposed to your advertising before they make a purchase. Frequency varies depending on audience, advertisement creativity and other variables, but typically, you need a frequency of around six before a purchase is made. However, that figure is already becoming somewhat old-school as media fragmentation continues and traditional media like newspapers, magazines and TV are being spun on their head in favor of online and social media advertising.
Advertising CPM
What is advertising CPM? A little more complex than the above advertising terminology, advertising CPM refers to your “cost per thousand” when advertising a small business. The M is Roman for one-thousand. Advertising CPM is a key ingredient for determining relative costs between small business advertising media.
How To Calculate Advertising CPM
Advertising CPM is easy to calculate. Let’s say you are advertising a small business in a trade magazine with a total reach of 40,000 people and the magazine’s advertising rate is $1,000 for your ad. Then your advertising CPM or cost per thousand would be $40. Pretty easy! Simply take the advertising reach and divide it by the cost of your advertisement. Calculate advertising CPM for all of your small business advertising to help determine the cost effectiveness of each media.
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Nice clear cut post. So many small business owners don’t realize the value of advertising online is the fact that you don’t have to spend a fortune to make a difference!
Darren,
Very true, small businesses don’t need to spend a fortune with online advertising. Just a little good old fashioned hard work via research, planning and execution.
Thank you for posting Darren!