[Musings of A Game Store Owner] Advertising- Pros and Cons

When you own a business, and you want to increase the amount of traffic, exposure or customers you have; the “common knowledge” is that advertising is the way to do it. About 15 -20 or so years ago, there were really only a few *good* options for your advertising dollars, and they worked differently according to what you wanted to do.

You could have and ad like this, if you wanted. It would get attention!

“Back in the day”, the choices were TV, Radio, Newspaper, Billboard and Direct Mail. These markets offered specific advantages and disadvantages, as well as pricing according to several interrelated factors.

The basic breakdown for cost was something like this: how MANY people were you going to reach, and how OFTEN would you reach them?

Based on those factors, as well as “demographics” and how likely they were to be a receptive audience to your ad, your price went up or down. Each advertising type offered specific advantages or drawbacks, and those factors were figured into the cost of your ad. If you are a small business selling hand knitted Cthulu slippers, an advertisement in the weekly free paper everyone throws away might be AFFORDABLE, but whether anyone sees your ad or acts on it might be why the ad is so low priced. However, an ad during the SuperBowl will reach TONS of people, but costs a whole lot of money that maybe you don’t have.

You can’t afford this- or an ad in the SuperBowl.

Advertising representatives often talk about ROI, or “return on investment”. In plain language, it means how much a customer or sale “costs”. That might seem counter intuitive, when you are trying to gain customers, so I will explain.

[FULL DISCLOSURE: I SOLD ADVERTISING FOR FIVE YEARS. I AM NOT SCUM.]

An advertisement is an investment with hopes of gaining a customer or sale. Like the stock market, advertising is not guaranteed to do this. It is only guaranteed to deliver the actual “product” (ie space in a magazine/paper, spot on TV/radio etc). The investment costs money, and the return is the customer coming in the store or buying the product/service. The ratio of customer to investment is called ROI.

A real example: a few years ago we won a “best of” award in a local paper. The paper called us to see if we wanted to run an ad thanking our customers in the edition where we were mentioned as the winners. We agreed, and spent roughly $600. To my knowledge, we only gained one BRAND NEW customer from that ad. If we look at it on the surface, that return on investment was very low.

However, if we look at it from the amount of money that customer has spent with us, the return was INCREDIBLY high. The customer in question spent a LOT of money with us in the time since the ad ran, AND he brought his friends. That $600 was well worth it in the long run.

Ad reps don’t know those kinds of numbers when they sell you an ad. They know what their product delivers- either location, time, specific customer base or other factors that are seen as valuable. It’s up to you to decide whether their delivery method works for you.

Where is the bubble gum?

The way ad reps want you to look at ROI is how many people saw your ad for the dollars you spent. Then they break down the cost per impression so it looks like you are getting a huge bang for your buck. If an ad costs $60 and it reaches 6000 people, the cost per impression is 1 cent. That might sound great to you. The next thing to determine is whether any of those 6000 people call you.

To hear an ad rep tell it, even one call is worth that penny you spent to get the phone to ring. But maybe the deciding factor isn’t whether the phone rang, but rather whether the customer BOUGHT something.

So one ad won’t cut it- very few people act on a single, solitary ad. It takes multiple exposures to your message to get a customer to act. So you have to KEEP advertising to get something called TOMA -top of mind awareness. It’s that “little nugget” of your name in the mass consumer’s head that makes them thing of YOU when they need XYZ gadget and not the company next door. Continued advertising is often called “marketing”, especially when the purpose is “general goodwill” and not a sale, or a specific message.

I did ask about the intent behind the ad before. As an ad rep, I’ve had customers want to spend their last $100 on an ad to save their business. The problem with that kind of thinking is that it misses the point, and the ad probably won’t deliver. It puts all the eggs of the business in one basket.

Good advertising should have a specific, definable purpose, and should have a definitive time frame to do it in. An ad for a sale, for example, is intended to get people to your business and encourage purchases. It should be for roughly the time of the sale’s duration, and you can track whether it works through a simple question at the register. (How did you hear about us?)

Today, advertising is totally different. Online advertising is HUGE, and older advertising venues are less dependable. Newspaper and radio are almost dead as ways to reach customers, direct mail is rarely used and billboards are a niche market. There are so many different areas and ways to reach customers that knowing how and when to spend your money can be a difficult thing.

Facebook? Twitter? Websites? Google? It’s confusing and can be hard to tell what to do. That’s often why so many do so little- overload. Many of those that do spend money don’t always know how to balance their delivery to their customer base and buy ads that either aren’t effective or helpful.

The positive sides of ads are obvious-goodwill toward your business and increased traffic/business. You can easily track the efficacy of an ad by testing two similar but differing ads in the same market (called A/B testing) and seeing which gets the better response. You can do fun, crazy things with ads to build a specific image of your company (a local furniture company does a goofy ad where you “always get a free onion” because the “prices won’t make you cry”) or you can feature your involvement in the community in ways that make you more appealing to your market.

The downsides? They cost money.

For a small business, an ad is a luxury, and an ad BUDGET is a joke. $100 a month on an ad? Or $100 on inventory, payroll, taxes, repairs or any other various costs of running your day to day operations? For most owners, the choice is the latter.

They don’t always work. Sometimes the thing that seems awesome in your head turns out to be a dud (or worse, a disaster), or your customers are busy checking out some different thing.

Getting and keeping attention and interest is one of the primary goals of any business owner/manager. Turning that interest and attention into dollars is right after that in terms of priority- and maybe before, depending on the business and the owner.

So when it comes to gaming, who advertises? To me, the better question is HOW. Think about this for a minute. Have you ever seen an AD for GW? Their products? What about PP or Mantic? If you have seen/heard an ad, where was this advertisement? I bet it was at your game store, or on a forum for gamers.

One of the biggest ways to advertise in the gaming industry is to store owners through trade magazines, or through “sell sheets”. These used to be literal sheets of paper with lists of items available for sale (and sometimes with pictures and descriptions) that were sent out to dealers. Now they are emails that store owners read and often talk to their customers about- sometimes going as far as printing out the email and posting it in the store.

The downside to this is a lot of owners don’t read the emails. So what’s a business like GW to do to get interest? Rumors.

They can deny it all they want, and to some extent the “sue-happy” reputation only furthers the interest in a good rumor- but unsubstantiated possibilities are a great way to garner interest without spending much (if any) money at all. The rumor mill will also often generate ideas for new products for your business without any R&D investment. Win-win! Not every company does it this way, and there are positives and negatives to doing it other ways.

Every business is different and has different needs, so the advertising methods used have to cater to those, if and when ads happen.

I’d love to hear thoughts on the best (and worst) ways to advertise and thoughts on why each is better. I might just use those ideas!

You may also like...