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Advertising Decisions in Calgary, Lethbridge, and the Rest of Alberta – A Financial Approach

Advertising Decisions in Calgary, Lethbridge, and the Rest of Alberta - A Financial Approach

Advertising 101

After I review why we advertise, I’ll talk about some of the problems with Lethbridge advertising (these are the same for any city, I’m  just addressing the city in which I live).


The Seven top reasons to advertise are:

Sell – this is 90% of what goes on in Advertising

Reposition – think of: (a) different ways to use a product (baking soda for cooking, fridge and carpet deodorizer, tooth paste)(market penetration)
(b) different people to use your product (market expansion)

Introduce – a new product, service, or business

Resuscitate an old brand – or the famous “under new management”

PR – get a story out that you have a scholarship program for high school students

Respond to crisis – Tylenol, cow, pig, dog food, spinach, pistachios…

Solidify market share – similar to re-position but often this is ‘advertise because the competition is advertising.’

Problems with Advertising

For everything that I see, Lethbridge is the same as every other city in Canada. There’s mix of good advertising, bad advertising, good practices and not so good practices. I think the biggest problems come from (1) overly high expectations about the power of advertising, (2) the opposite, not advertising because ‘I don’t need to’ and, the reason some people may not like this post … (3) letting a graphic designer, web designer, print shop, radio or TV station create the ad for you. These five resources have a place in the whole process but they should never be thought of as a one-stop solution.

Advertising won’t make a poorly run business a successful business – it will make it worse by draining financial resources.

Advertising only works for a well run business that, when new customers respond to the advertising, the business creates some loyalty with the customer and therefore, good advertising for a good business spins off in to positive word of mouth.

What else could be wrong?

Have you ever said or heard this,” I put an ad in x-newspaper and it didn’t work.”

Running an ad once probably won’t work very well. At the other extreme, advertising every day is probably an even bigger waste of money. Some experts say that over advertising is better than advertising too little. But that is a very general statement, which doesn’t consider YOUR particular business. I suggest a little experimentation.

You can also apply some simple math for advertising optimization.

Facts: (1) The more you advertise, the cheaper it gets.
(2) Each successive ad is enhanced by the previous ad (up to the point of optimization).
(3) Over advertise and the benefit of each ad is reduced.

A(1) = the first ad cost, A(2) = the second ad cost… The benefit of the ad in dollars [$150]

A(1 $200)[$100] + A(2 $190)[$150] + A(3 $180)[$180] + A(4 $170)[$200] + A(5 $160)[$210] + A(6 $160)[$190] A(7 $160)[$150]… to the point where an extra ad does nothing for your business.

Note that the first ad costs you more than what you received in extra business. This is often how advertising works.

There are many factors to what makes a good ad: quality of design; size; where the ad is – what newspaper, radio, website, billboard; the product; the offer, etc.

What is important is that you track the response, and in as little as a year or two, you’ll have a much better handle of what works and what doesn’t work. It won’t happen overnight, but if you don’t want to always be flying by the seat of your pants, start tracking your ad spends.

I guess the universal problem with advertising for small businesses is the time it takes to figure it all out. The not so simple solution is to find some one that you trust to manage it for you.

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