My first Financial Planner spent a lot of time preaching about the benefits of diversification. That was over 20 years ago, and many investors were betting on the rising stars of the first dot com bubble.
He made a case for spreading my savings across different types of investments, the goal being to increase my odds of investment success. It’s like saying since no one can know for sure who is going to win this race, let’s bet on everyone.
Shortly after hearing his advice, the bubble burst, and fortunes disappeared overnight. Fortunately, I had followed his advice, or I would have been left holding 10,000 shares of Altavista.com or some other worthless stock.
But diversification isn’t just important in financial planning. It’s also a crucial part of planning your use of advertising.
In this week’s newsletter, I’ll explain why you should always spread your advertising across multiple forms of media.
For clarification, media includes all of the ways for you to deliver your message to families in your local market. Some common options are direct mail, radio, TV, billboards, online newspapers, Facebook advertising, Google Adwords, and many more.
There are two main reasons to diversify your advertising budget by using multiple media forms: coverage and compounding.
One of my clients has a competitor who spends a lot of money on TV advertising. He primarily targets what I call the “Wheel of Fortune” crowd.
That’s not a bad idea and can certainly be part of an overall plan. But in this case, the competitor is spending his entire ad budget on this particular strategy. That’s a problem.
Are there seniors in your community who do not watch Wheel of Fortune every evening? Of course!
Seniors today are far more active than they were in the past. Some may watch TV after dinner but many are out pursuing other interests. The point is that you are not going to cover your target audience with just one form of media.
Maximizing your coverage comes down to asking yourself, where does my target audience congregate and how can I get my message in front of them? One form of media is rarely the answer.
The second reason to diversify the forms of advertising media you will use is to achieve what I call the compounding effect.
In its simplest form, compounding is A x B x C instead of just A + B + C, where A, B, and C are the results from individual campaigns.
When someone says “I saw your ad on TV”, you have one successful campaign and you might win some calls as a result.
But when someone says “I see your ads everywhere”, the compounding effect has kicked in and your call volume will grow significantly.
Consider this scenario…
You go to a website to check out a new tool. Then you visit another website and notice an ad for the same tool. For the next month, almost every website you go to has the same ad.
In the internet marketing world, that is called retargeting. It’s really just the compound effect in a digital format. Companies use this form of advertising because it works far better than just a single ad on a single website.
Funeral home advertising works the same way.
If someone sees your ad on Wheel of Fortune, then sees a billboard, then sees an ad in the local senior magazine, the effect compounds on itself. The overall results go up because compounding has influenced the target audience far more than any single ad could accomplish.
The bottom line is that if you want to increase your advertising ROI, you must diversify and never put all of your “eggs in one basket.”
By diversifying, you will maximize coverage in your local market and compounding will significantly increase the overall effectiveness of your campaign.
Until next time
PS: By the way, diversification only works if you use a consistent marketing message everywhere. One of my clients has a competitor who hired the local radio station to develop a campaign which he is running nonstop. He also has a funeral home social media expert running a Facebook ad campaign, but the message is different. What a waste of money!
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