How Ad Budgets Aren't As Bad As You Think

Advertising is important, but before you pour all your money into spending for ads, you should figure out how much you should spend. Often a complex and abstract problem can be undone by wrapping step by step actions that move towards a working solution.

Remember this isn't a 100% sure fire guaranteed way to work for everyone, because advertising is an art more than an acquired technical competency. Know what you're spending on and have control over the actions to understand and adapt, and with technology this can be done quick - saving you time and investment dollars.

You must be wondering, this is the first time you are doing advertising and the thought of spending money with no guarantee of return scares you. Your business till this date has relied on networking and word-of-mouth. Big competition use ads frequently, and you have an inclination to try with a small ad campaign, but you worry that it will cost a lot of money.

Q: Where do I start?

A: The first thing you could do is to calculate your minimum and maximum budgets. What this does is by giving you a minimum and maximum limit for spending on your ads.

Step 1: 

Use 10% and 12% of your projected annual gross sales and multiply each by the markup made on your average transaction. The formula is as follows below:

Minimum budget = 10% of projected annual gross sales x markup made on average transaction
Maximum budget = 12% of projected annual gross sales x markup made on average transaction

Important note: Do not confuse markup with margin. In our calculation we use gross markup and not margin. For example: You sell a t-shirt for RM 150 and your cost is RM 100 your markup would be 50% (1-[150/100] = 0.5). Your margin, however, is only 33.33% (50/150 = 0.3333). Most retail stores carry a markup of approximately 100%, but more expensive products and services typically only carry a markup of only 10% to 15%.

Step 2: 

Deduct your rent from both the minimum and maximum budget.

Step 3: 

The remaining minimum and maximum budget represents your allowable amounts for the year.

At the end of this step you might have learnt that you've spent your ad on expensive rent or that you should have done a lot more advertising.

Here's a working example so you can grasp the concept above:

Assume that my business is projected to make RM 1,000,000 in sales this year, I have a profit margin of 25% and my rent is RM 30,000 per year (RM 2,500/mth x 12 mths). The first thing to do is is calculate 10% and 12% of gross projected sales, which is RM 100,000 and RM120,000 respectively.

Second, we must convert margin to markup. RM 250,000 is gross profits (25% x RM 100,000) and the cost incurred to the business is RM 750,000 (RM 1,000,000 - RM 250,000). Dividing the gross profits by the cost incurred to the business we are able to find that the markup would be 33.33% (RM 250,000 / RM 750,000 = 0.3333).

Finally, we multiply both 10% and 12% projected gross sales with the markup to see our adjusted  minimum and maximum ad spend budget, which is RM33,330 (RM 100,000 x 33.33%) and RM 39,996 (RM 120,000 x 33.33%) respectively. From these two budgets we must then adjust for rent leaving us with the final adjusted minimum and maximum ad spend budget of RM 3,330 and RM 9,996 respectively.

Most advertising / sales reps will sale put a ballpark figure of 5% to 7% of gross sales to be the "correct" amount for advertising, but don't believe it. It isn't possible to put a 1 size shoe fits all percentile without taking into consideration the markup on your average sale and cost of rent.

Reasoning can be placed that an expensive rent can be translated as good visibility in a good location, requiring less advertising compared to an affordable location. This is fair judgment and should be weighed against the calculation above to justify rent as a form of advertising.

The formula above is a metric I use to measure how the business should prepare its overall ad spend budget and taking into consideration the markup and rent expenses it will incur. Good luck! :)

Once you've worked out your ad budget pull your campaign together. Here are some additional resources to give you inspiration on how to move forward How to run a SMS Campaign for you restaurant and How to conduct a SMS Giveaway.

If you're looking for a partner for SMS Marketing drop us a mailer.

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How to Conduct a Giveaway (a SMS Marketing Cheat Sheet)

Driving engagement with your fans is the buzz of the marketing world right now. A 1 way passive interaction between the advertiser and the receiver doesn't generate the best return on ad spend as the world is in demand for more. Competition among advertisers is fierce and there is a greater need to stand out from the crowd.

A giveaway is common, but running a giveaway campaign through sms marketing is not common in Malaysia.

Do note that there is a basis for my perspective in running a giveaway through SMS marketing, mobile penetration in Malaysia is at an all time high, 144.8%, and more marketers should take advantage of this channel.

Here's an example, our friends at Chipotle finished their Great Dorm Giveaway, which allowed students to enter the SMS giveaway by texting DORM2 to the SMS short code 888222. The SMS giveaway gave the chance for students to win a Chipotle catered party for 100, in addition to a $1,000 Target gift card.

Runners up would receive a Chipotle catered party for 20 and a $25 Target gift card. When fans texted “DORM2” to 888222, in order to enter the SMS giveaway, they received the follow text message response, asking them to respond YES to confirm that they were a student at a participating college. This drove student engagement with Chipotle a marketing objective that drives brand awareness, and recognition amongst its customers.

Giveaways are common to drive brand recognition for brands and to introduce increased engagement with customers that are already passively participating with your brand. This introduces an action layer that encourages customers to interact and actively participate with brand based activities.

Want to learn how you can employ this for your business too? Learn more here.

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Tried and Tested Old-School Marketing Hack (SMS Marketing)

Owning a cafe is great, but you're more often than not making a small percentage of potential customers within a certain distance radius. You've got a great location and business is now moving at a predictable pace. Driving more new walk-ins to your cafe is tough because marketing efforts in different locations aren't driving back the return on ad spend you're expecting. Here's a perspective, why not target existing customer databases that have already interacted with your store, but don't return often enough.

Either these customers are unaware that you've put in effort to provide them with special offers and deals, or these customers came to you out of the spur of the moment and impulse entry decision to give you a try. To better ensure that these customers keep coming back you'll have to remind them and a great way to drive repeat customers are through SMS marketing.

"Here are 5 reasons why your cafe should be considering SMS marketing as part of your ad spend."

1. The big boys are doing it, you're missing out if you don't. 

Subway, Pizza Hut, Papa Johns, and more are doing it to keep their customers informed.
Helps build a loyal customer base.

For example: Taco Bell launched a mobile marketing campaign in an effort to develop another channel to communicate with their most loyal customers. To subscribe to the Taco Bell mobile marketing campaign, customers texted “TBIC” to 30364. To incentivize customers to opt-in, Taco Bell offered a free Frutista Freeze, with the purchase of any food item, after a customers opted-in to the mobile marketing program. The restaurant’s mobile marketing campaign was promoted to customers through traditional media such as radio, television and print, generating 13,000 opt-ins within the first five weeks.

2. Get to more customers. 

Papa Murphy’s launched a mobile marketing campaign pilot with the goal being to bring more customers to their Kansas City locations. By using in-store signs, tent pop-ups, and an online opt-in form to advertise their new mobile marketing campaign, the restaurant was able to build a 16,000 person mobile customer database. Mobile marketing promotions such as a $5 Chicken Bacon Artichoke pizza generated redemption rates of more than 9 percent, while deals like a $5.55 taco pizza on Cinco De Mayo generated redemption rates of 11.5 percent, and half-off pizzas generated redemption rates north of 12 percent. The highest redemption rates Papa Murphy’s saw was with a $5, 3-topping pizza, which generated a 17.9 percent redemption rate. The mobile marketing campaign has since expanded across 26 other states, and is estimated to have more than 100,000 mobile subscribers.

3. Increase repeat customers.

A 16-store franchise of Subway restaurants in the New York region launched a mobile marketing campaign to increase repeat business with their customers. The program was advertised in-store with various forms of marketing collateral, and on local radio and television as the “My Subway Mobile SMS” program. The franchise after a few months had generated a database of 5,000 customer mobile phone numbers. During this period, the Subway franchise sent out 13,000 mobile promotions, averaging a 9% redemption rate, which was significantly higher than the 1% redemption rate Subway experienced with their direct mail campaigns.

4. Find a channel that stands out better than channels that don't

During a 15 month period, Pizza Hut U.K. setup geofence locations within a half-mile radius of each of their 340 Pizza Hut locations. During this period, Pizza Hut found the mobile marketing campaign was on average 142% more efficient in increasing incremental sales than other marketing channels, and 4.4 times more effective than TV ads, and 2.6 times more effective than online ads.

Carl’s Jr. sent out a mobile offer to customers on May 14, 2013. The mobile offer was for a $6 burger combo for only $2.99. Not only did this mobile offer get a 19% redemption rate, the fast-food chain generated $14 in new sales for every $1 they spent on this campaign.

5. Increase store traffic.

Dunkin’ Donuts ran a mobile marketing campaign in the Boston area, encouraging customers to opt-in to mobile offers. The mobile marketing campaign was advertised on local radio and through mobile internet ads. This resulted in 7,500 consumers opting in to receive Dunkin’ Donuts mobile offers. After the first mobile offer, 17% of recipients forwarded or showed the offer to a friend, 35% considered themselves more likely to buy lattes and coffee from Dunkin’ Donuts in the future, and Dunkin’ Donuts restaurants in the Boston area experienced a 21% increase in store traffic.

What if you're cafe is only a 1 cafe operation?

Don't sweat it because a Papa John’s Pizza franchise in the U.K. ran a three week mobile marketing campaign, sending a mobile offer to their 8,1000 previously opted-in customers that offered customers any Pizza, of any size for £6.99 (pickup) or £8.99 (delivery). This one mobile offer increased sales for this franchise during the three week period by 33%.

Find out how you can increase sales and repeat customers. Get started with a campaign now.

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How to run a SMS Marketing Campaign for your restaurant? Subway case study

Marketing is important for your restaurant business, regardless of whether your business is small, growing, or large. In your ad spend you'll have integrated into your strategy a variety of channels in your mix, but one that is often overlooked is SMS campaigns. SMS campaigns are extremely targeted. Think of it as an email newsletter, but any notice or information you communicate out to your customer group goes direct to their phones as long as there is a phone line. Just a note, if you're in Malaysia the penetration rates for mobile phones is at an all time high, 144.8% (Malaysian Digital Association, 2016).

So for those who have read thus far, here's the gist of it. Your restaurant needs customers to be reminded that you have special offers catered to their needs, what better way to inform them then to give them a reminder that they'll be sure to notice. Here is a case example of Subway the fastest growing food franchise to learn how we can apply SMS Marketing to your restaurant business in Malaysia.

Subway announces to their customers that they can get deals sent directly to their phones. This is followed by campaign graphics that introduce the benefits of signing up to be on Subway's list.

Not pictured in the screenshot above is Subway’s abbreviated text messaging terms & conditions, which are as follows: Msg&data rates may apply. Max 10 msgs/mo. Msgs may be auto dialed. Consent not required to buy goods/svcs. Only available for smartphones with a data plan. For help, text HELP to 782929. To opt-out, text STOP to 782929.

To see Subway’s full text message terms & conditions, click here. If you prefer to opt-in on your mobile phone to receive Subway weekly text message offers, and receive a free 6-inch subway sandwich, text “OFFERS” to Subway’s dedicated vanity short code – 78292. Did you know that Subway’s vanity short code 78292, spells out “SUBWAY” on a mobile phone’s dialpad? It’s true, try it on your own mobile phone. This is added branding for your restaurant. After submitting your mobile phone number and zip code to receive Subway text message offers, you’ll be redirected to the following page.

This page tells you that to start receiving Subway text message offers, you first need to reply to the confirmation text message sent to your mobile phone from their SMS short code 78292. As you can see from the text message below from Subway’s SMS short code 78292, Subway requires you to reply “Y” to confirm that you want to opt-in to receive Subway’s weekly text message offers.

Why does Subway require you to reply “Y” via text message, after you enter your mobile phone number into their web form? Not only is this required by the MCMC Malaysia, it protects Subway from sending text message spam. How does it protect Subway from sending text message spam?

Here's a scenario, what if in Subway’s web form I accidentally typed in (206) 334-4011, when my actual mobile phone number is (206) 334-4012. If Subway automatically opted-in the mobile phone number (206) 334-4011, without requiring them to reply “Y”, every text message offer sent to that mobile phone number from Subway would be considered text message spam.

That’s why it’s critical that before you opt-in a customer’s mobile phone number, you confirm with them that it is in fact their mobile phone number, and they want to receive your text message offers.

When you reply to Subway’s opt-in confirmation text message with “Y”, you receive two text messages in return. The first text message you receive is the coupon for your free 6-inch subway sandwich, and the second text message is welcoming you to the text message campaign. As you can see from the text message below, the welcome text message from Subway is customized based on the subscriber’s zip code.

To redeem your coupon for the Subway 6-inch sandwich, you have to click on the link. When you click on the link, you’re taken to the following mobile website, where you can redeem the mobile coupon. It’s worth noting that below the “REDEEM” button, Subway instructs you to only press the redeem button during the purchase process in the presence of the cashier. You’ll see why Subway tells you this in the next mobile screenshot. So after you’ve clicked the “REDEEM” button, you’re presented with the following pop-up on the mobile website.

Subway warns you that the coupon you’re about to access will expire within 5 minutes, so it’s best to be at the cash register at your local Subway before clicking “CONFIRM”. Once you do click the “CONFIRM” button, you’re present with your subway coupon, as you can see below. You’ll notice that there’s a 5-minute timer on the Subway coupon, which expires the coupon after it runs out of time. It’s also interesting to note that the coupon specifically tells customers that if the timer hand is not moving, the offer is not valid.

Why? This is to prevent you from taking a photo of the mobile coupon and trying to redeem it. In a photo, the timer hand would not being moving. What does it look like when the Subway’s mobile coupon is expired? See below. Why does Subway do this with their mobile coupons? The reason is to prevent mobile coupon fraud. In mobile marketing, coupon code fraud is when a coupon specifically for new mobile subscribers is used by customers that never opted into the mobile marketing campaign, or used by the same customer multiple times.

To prevent mobile coupon code fraud, Brands like Subway will limit the usage of each mobile coupon, either by using unique one-time usage coupon codes for each mobile subscriber, or in the case of Subway, they’ll limit the time that the mobile coupon is visible to the customer. One of the best parts about Subway’s text messaging campaign is that they’re advertising it everywhere, including in a commercial! Below are some of the examples of Subway advertising their text messaging campaign to customers.

If you're interested to run SMS campaigns like Subway for your restaurant find out more here.

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Keep Your Customers Coming Back Even If Your Restaurant Is Closed For The Holidays

Increase your restaurant's upside potential in closing sales through better qualified marketing leads. Run campaigns that reach your potential target audience with a strong channel marketing strategy that would lead on.

There's a saying in the restaurant business in Malaysia, owners need to work 365 days a year even through holidays and notable breaks like Chinese New Year, Hari Raya, and Deepavali. This can be draining because these are times when children look forward to spending time with parents, and a time for when parents have the time to spend with family.

It's a concern for owners to close the restaurant, even during off-peak hours. As they say every hour the restaurant doesn't operate the restaurant looses the opportunity to make earnings from a hungry customer. 

So we went out to find an example on the Internet to see how some restaurant owners tackled this issue. Low and behold we found an interesting take to this issue, where a famous chain restaurant in the US took advantage of the downtime by approaching it with a proactive response to customers interested in their service by encouraging them to return during the down-time.

Did you notice that Chipotle’s across the country were closed on Monday for lunch? What does this have to do with SMS marketing you ask? Instead of Chipotle just closing their doors, turning away loyal customers, they decided to use an SMS autoresponder to offer a free burrito, burrito bowl, salad, or order of tacos, to those customers that were inconvenienced.

How did it all work? First, when a Chipotle customer approached one of the locations that were closed, they were greeted with the following sign on the door. The sign read “We’re closed for lunch today to attend a meeting with all the other Chipotle employees. But don’t worry, we’ll be back open at 3pm. If we messed up your lunch plans, let us make it up to you: visit chiptole.com/raincheck. See you soon.” You can see a photo of the Chipotle sign below.

FYI – Every Chipotle restaurant in the country closed for lunch on February 8, 2016, so that employees could meet and discuss food safety strategy, following several reports of E. coli linked to the popular burrito chain.

When customers visited chipotle.com/raincheck on their mobile phones, they were told to text “RAINCHECK” to Chipotle’s SMS short code 888-222, in order for Chipotle to hook them up for messing up their lunch plans. You can see this below in the mobile phone screenshot.

If for some reason you didn’t open up chipotle.com/raincheck on your mobile phone, you still could access the website on your desktop computer. A screenshot of the Chipotle website from a desktop computer is below.

The next step was for customers to text message “RAINCHECK” to Chipotle’s SMS short code, which is 888-222. After texting “RAINCHECK” to 888-222, customers received a text message autoresponder message, with a link to a free burrito. You can see the text message below.

Do you have a restaurant, and are you interested in SMS marketing? Learn more about how SMS marketing can help your restaurant here.

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Learn How You Can Make Your Social Sharing Explode

Content marketing and social media are two different thing. Neither content marketing nor social media can be done well without the other.

Social media is only a slice of your content marketing strategy pie. Social media should always be included when you devise a content marketing plan, while website, partnership sites and search engines should also be considered.

There are various ways to distribute your content marketing. With that being said, social sharing should be placed as the top priority.

Every piece of content you post online should be promoted, linked, or reposted on Facebook, Twitter, Instagram and other social media platforms. Social media is a direct path to brand loyalty and engagement with your target audience. Content marketing’s objective is consumption, while social media revolves around participation.

Social media comes with other benefits as well. For instance, social media is a fantastic tool to obtain valuable audience insights. Most of the social networking sites offer some sort of analytics. One of the few notable ones include Facebook Insights and Twitter Analytics, which rivals even the king of analytics, Google Analytics with their audience nuggets.

Social media postings allow instant feedback. For websites, it might take days or even weeks to analyse and evaluate how well the new content is resonating. Social media allows you to know within hours. Social shares can get you these valuable insights. When people share your content, it’s a signal that you’re doing things right. In fact, sharing is even better than commenting because sharing allows you to reach even more people while commenting doesn’t, and it isn’t always a good thing because it might be a bad comment directed towards your company.

Although results vary according to the social media platform you chose, there are still many ways that can increase sharing.

Go Wild With Visual Content

‘Visual content is the new black.’ This phrase has been thrown around since 2012 to depict the effectivity and efficiency of compelling visuals.

Visual content is extremely shareable. Try to think for a moment, do you see a witty meme and cute puppy photos shared on your Facebook news feed often? Most probably, the answer is yes. Why? Because they are hilarious, fun, and something out of the box that they can relate to. Your objective as a content marketer is to be the source of a photo that people share.

• Think twice before using a stock photo. At times, stock photos lack a source of life and personality. It’s good to have a little fun sometimes with humorous photos that you might find ridiculous. It’s good to incorporate comedic elements to entertain your audience and show that you’re not a one-dimensional cardboard.
• Release the designer within you. Don't give yourself excuse to use plain and boring visuals. Let your creativity go wild and be open to out-of-the-box ideas. Incorporate interesting design with compelling texts in your visuals.

Regardless of the nature of your campaign, it is always good to include one or several visual elements/content that are light, fun, and entertaining. After all, everyone likes a little laughter to loosen up from time to time.

The Power of Videos

Producing a video is extremely difficult and hectic, but they are worth the time, money and effort. Research has proven that digital video content that are interesting and compelling enough has a much higher chance to go viral.

Another suggestion to incorporate videos into your content marketing strategy is to plan a series instead of a one-off video. This gets your audience hooked and tuned in to you from time to time.

These videos can be as simple as vlogs or even silent videos, meaning videos that insert text to convey their message instead of having people speaking or voice overs.

If there is a slightly higher budget you can even conduct an interview based video, where you collect opinions from the public that revolves around the central theme/topic that fits your mission statement. Organisations with a relatively higher budget will choose to produce PSA (Public Service Announcement) themed videos that incorporates emotional elements that are capable of touching and evoking the public’s emotions.

These videos lay a huge impact to the public because it touches on their fragile and sensitive inner emotions. It shows that the organisation has a sense of humanity and actually cares about things happening around us, making the audience feel that they care about them. Ultimately, portraying the organisation in a positive and likeable way.

List-based Articles

Research has proven that in recent years, list-based articles have gotten very popular. This is due to the fact that users prefer digestible content on social media.

List-based articles’ content are broken down into bits that are direct and easy to consume. It also adds the ‘share’ factor that drives users to repost/reblog/retweet.

Make sure the subject of your articles are of your audience’s interests. When writing these articles, make sure your content either addresses their needs, or is captivating enough to make them read and share. A few great examples is, “Twitter Goes Public: 21 Things You Should Know”, “6 Types of Employees - Which Are You?”, “6 Ways To Nail An Interview”.

These subject (and their headlines) are intelligently crafted and it prompts people to click in out of curiosity and interest.

Baiting

What is baiting on social media? Baiting is the act of selecting a hot topic or trend that fits your brand and ask a question informally on your network. For instance, if you’re an alcohol company, bait your readers several times a week:

“A research done recently shows that 62% of whiskey drinkers like to mix their whiskey with apple juice. How do you like your whiskey to be mixed?”

“Herbal tea-flavored whiskey?! What do you think about this Oriental whiskey flavor?”

“They say night time is the best time to enjoy whiskey. Which part of the day is your favorite time to enjoy a cup of whiskey?”

The key to this is to be moderate and encourage participation among your audience. If people start making an interesting or insightful point, thank them because they are giving you alot of attention. This will also drive them to invite their like-minded comrades into the conversation.

All in all, these tips will no doubt increase your social sharing, but your work doesn’t stop here. You must set a goal in mind, either to convert your followers into legit customers or garner more followers and promote brand loyalty.

Keep your objective in mind every time you post and be thankful for all the participation you get in social media because it shows your audience’s loyalty towards your brand. After all, the ultimate goal of social media is to turn customers into a voluntary marketing army.

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4 Ideas to Drive More Repeat Conversions

Everyday your subscribers receive a large number of SMS. With so much competition for attention, it's highly likely that a percentage of your subscriber list will lose interest in and stop engaging with your sms marketing campaigns. This may not seem to be a big problem, but this will slowly crop up to affect a large percentage of your list if not careful. As your list engagement drops you run the risk of damaging your sender reputation and your sms deliverability rates.

We now know the problem, but how should you address this issue? By creating special re-engagement SMSs targeted directly at your "inactive" subscribers.

So what are some re-engagement SMS examples to inspire your next efforts?

1. Improvements on products, while you were away...

"We've made some improvement since you've been away, join over 5 million members who are"

What's good about this re-engagemnet SMS is it draws attention to the improvements you have in your products since your subscriber's last engagement. There is a tactful action to also include a social proof of how more than 5 million members are currently using their services.

2. Do you still want to hear from us?

"It's been awhile, do you still want to hear from us? We want to ensure that you continue to receive content that is relevant to you."

This is a simple question, but the focus is to allow subscribers to update their preferences and keeps them engaged with you. The benefit here is you are aware that your subscribers are still interested in your content.

3. Surprises

"Pick from two special gift sets exclusively for you, follow this link here ____"

We all love surprises. Make use of your subscriber's emotional instinct in their re-engagement SMSs.

4. We hate goodbyes

"We hate goodbyes so we're sending you one last message, Let us know if you want to continue receiving messages from us"

This is an emotional re-engagement SMS that informs a subscriber that it will be your last email to them. This is a good way to keep subscribers that are truly interested in your brand, but beware do not use this too often.

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