With their promotional spend touching $16.9bn in 2021, Amazon has become the world’s largest advertiser in history. While the overall advertising growth level in the past year rose by 2.8%, Amazon was much ahead. The company’s ad investment numbers increased by a solid 55% in 2021.
The fact is, almost 2% of all global ad spend comes from Amazon. Its closest rival, Procter & Gamble, is far behind in ad spending.
The company said marketing costs rose by $5 billion, or 55 percent, as a result of advertising and other promotional efforts. Because marketing costs were “constrained” at the start of the pandemic, the company cut its outlay by $100 million to $10.9 billion in 2020 – its first reduction in 17 years. During the pandemic, Amazon’s sales have risen steadily, from $280.5 billion in 2019 to $386 billion in 2020 to $470 billion in 2021.
In its annual report, the company noted that “we direct customers to our stores mainly through a variety of marketing channels, such as sponsored search, digital and social advertising, third-party customer referrals, television advertising, and other initiatives.”
Even so, what works for Amazon may not work for you. You may not have the luxury of a large budget either. You must determine how much you should spend on your advertising campaigns as a business.
Let’s take a closer look at the subject.
The Right Way to Spend Your Advertising Dollars
Since social media, or media, is an ever-changing platform, it can get difficult to determine an exact advertising strategy. And even the largest advertiser in the world knows that no single marketing tool is the perfect solution for any business.
But some ideas can help you find the exact way of spending your money. Here are a few of them.
1. Identify Your Audience
Unless you know your own customer base, you will not spend the money effectively. Knowledge about age, gender, average income, etc., about your customers, can go a long way in forming the right advertising campaign. So, before you start spending money, spend some time acquiring this information. This will also help you enrich your content and provide solid value to the consumers. In short, you will be making better use of your money.
2. Create a Sound Plan
The second most crucial step is to formulate a plan. When your budget is limited, you need to think carefully about what you want to achieve with an ad campaign. That means taking a thorough look at the consumer trends and creating a proper message that will be delivered. Spending on a hastily planned advertisement is one mistake you want to avoid. Fix a timeline for each round of spending and stick to it. If the results are slow in coming, do not react too quickly. Assess the metrics and then take the necessary steps.
3. Focus on Mobile Advertising
If you look at the number of hours consumers are spending on their smart devices, you will surely understand the importance of mobile advertising. It is the primary form of digital advertising that’s cost-effective too. Besides, the volume of mobile internet traffic is higher than desktop traffic. Most importantly, you can create relevant ads to target customers more effectively by using location data. In case your mobile marketing spend is less than the spending for formats like print and TV, it’s time to cut back and redistribute the money.
4. Use The Right Medium
When it comes to digital, social, TV, or the traditional print format, what exactly is the right choice for advertising? The largest advertisers use all of these channels effectively. In reality, you need to make the best use of all of these platforms to reach out to your target group of consumers.
That means finding out where they spend most of their online time and using carefully crafted messages to catch their attention. The budget distribution should be based on the popularity of these platforms among the consumers. Diversify your budget across multiple platforms and then analyze the data to determine what works best.
5. Track Customer Media Habits
Do you think your customers spend more time on on-demand and streaming services than cable networks? If so, you need to concentrate your efforts and budget on these platforms. For that, keeping track of the media consumption habits of your customers is extremely important.
With millions of consumers forced to work from home in the past two years, consumers’ media and purchase behaviors have changed a lot. Once you learn about these trends, you can make the best use of them.
6. Work With Social Media Influencers
It goes without saying that a significant amount of your advertising budget will be spent on social media platforms. So, making use of social media influencers is a great idea. Since these individuals have already built trust and credibility with the users, their support goes a long way in promoting your brand. Obviously, you need to research the influencers and the audience they influence before deciding. That way, your content will reach the target group that is already interested in your niche.
7. Send the Right Message
Effective advertising is about sending the right message to your consumers. In essence, you tell a story that captures their interest. An exciting story that the consumers can relate to is a highly effective tool. So, make sure you spend your money on generating the right advertising concepts. Effective advertising is all about picking the points that separate you from the competitors. Do not try to convey too many things, or you might end up confusing the customers. A short and simple message delivered in the right way can be the best option.
8. Leveraging Data Effectively
While the influx of big data can be challenging to handle and manage, it offers a great way to effectively spend your advertising dollars. The data can help you to connect effectively with the consumers and develop better content. This will also help you to cut down expenses on irrelevant promotions. In addition, data can help you to identify patterns that can act as a guideline for your advertising strategy. You can create personalized ad messages to generate leads more effectively.
9. Retarget Customers
Make sure to spend your advertising dollars on dynamic retargeting. This works for both B2B and B2C businesses. It is more effective to place an ad in front of an existing customer or a person who has been to your website. Research points out that consumers are more likely to choose a product that they see frequently. You can create various segments of your customer pool and retarget them based on their behaviors and interests. It is one of the most effective ways to reconnect with individuals who did not convert during the first interaction with your brand.
Final Thoughts
These are some of the fundamental points to keep in mind while channeling your advertising budget. Even the most prominent advertisers like Amazon make sure to use some of these points in their ad placements.
At first, these may seem like a lot to keep in mind. But for small businesses with limited resources, spending every dollar correctly is extremely important. You may not be in the same league as the biggest advertiser in history, but you can achieve great results with the right plan, even with a small budget.
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