If you’ve read my other blog posts, you know I am a strong advocate of first developing a marketing plan before you invest money into advertising or other marketing tools.

A marketing plan should have specific goals you want to achieve for your business. But to achieve them, your plan may possibly recommend TV advertising, building an e-commerce website, or going to national trade shows — all costly endeavors.

Your marketing plan may initially be a “blue sky” approach — meaning there are no limiting factors to your ideas or goals. This is an excellent way to start your planning, as you don’t want to limit your initial creative brainstorming. But eventually every “blue sky” meets a cloud. And the cloudiest forecast for ambitious marketing is money — do you have enough marketing dollars to ensure a good shot in achieving your business objectives? If your budget is limited, and you can’t afford to implement your marketing plan in full, then you may need to readjust how ambitious your business goals can be.

Starting an aggressive marketing effort and not having enough money to finish is poor planning. As a pilot, I’ll use this analogy: it’s like flying across the Atlantic with a half tank of fuel. Sure, you’ll make progress, but your plane better have floats because you’ll be landing in the Atlantic, and not in Paris.

Occasionally, I’ll get a call from someone who wants to do some advertising in Westchester to promote their business. I’ll ask them what kind of budget they have, and they often ask, ‘what can I do $10,000?’

Unfortunately, not much. Westchester County, New York is not only an expensive place to live, but also to advertise. You can easily spend 10 times that amount on advertising and it may still not be enough, depending on what you’re advertising, and to what audience.

Okay, so as not to be a total pessimist, what can you do for $10,000? Well that amount could nicely fund a public relations program, which would help build awareness by getting your name out in the marketplace. Don’t ask PR to generate direct sales like advertising, but it could however, generate indirect sales and get your business off to a good start.

With PR and a $10,000 budget, you may not fly across the Atlantic, but you could go to beautiful Bermuda, and that’s not half bad, now is it?

Public Relations, aka PR, is great, because it gives the consumer a sense of an impartial third-party endorsement. It’s almost like the media outlet is saying:

“This company is good because we have analyzed it. We like the product/service they provide. Their core values are great. We think you should give them a try.”

And, simply by virtue of this unspoken endorsement, the PR coverage makes people want to buy/try/invest in their product or service. People want to be part of “it” – whatever “it” is.

This kind of PR coverage, if done well, can sometimes lead to a brand acquiring a cult status, especially among sophisticated buyers who don’t want to buy what everyone else buys. They don’t shop Wal-Mart or K-Mart. They’re “elites” and are looking for a unique brand experience – and they WANT to pay more for it because they want their experience to be different from a common, everyday experience.

Which is why, if a company is getting a lot of good PR, and developing a core group of devoted followers, one tactic they should employ is to pull back on their advertising, or stop it all together. A brand can be thought of a too “mainstream” if they advertising becomes too ubiquitous. Brands that have a cache can profitably stay off the mainstream “radar” by enjoying the loyal following of those who relish being part of a unknown, undiscovered brand.

In many cases, upscale brands can significantly damage their cache if their advertising appears too frequently or in too many media outlets. IZOD Lacoste polo shirts is an excellent example. A brand popular with the golf and tennis set in the 1980s, it became “mainstream” wildly popular in a few years. But, because of the brand’s overexposure in its advertising and its own popularity, it quickly lost its cache and sales dropped dramatically.

However, because everything old becomes new again, a new audience is rediscovering the brand. This time Lacoste is keeping the price point upwards of $100, which maintains it aspirational brand status and Lacoste is choosing to market the brand virally and eschew any mass advertising.

Recently, I read an article that appeared in the New Yorker Magazine. It discussed how two well-known cereal companies, Kellogg’s and Post, dealt with the economic depression in the late 1920s. At the time, ready-to-eat cereals were relatively new and Americans didn’t view them as a real alternative to oatmeal or cream of wheat.

When the Depression hit, Post did what most companies do, reined in expenses, cut back on research and development and cut its advertising budget. But Kellogg’s did the opposite, it doubled its ad budget, moved aggressively into radio advertising, and heavily pushed its new cereal, Rice Krispies. Even when the economy cratered in the early 1930s, Kellogg’s profits rose 30% and used that momentum to go on and become the industry’s dominant cereal company.

Research has shown time and time again that companies that continue to spend on acquisition, advertising, and research and development during economic downturns do significantly better when the economy turns around.

You can read more about Kellogg’s in my book: “Branding Insights for Small Business” available on Amazon.com.

To read the complete article, click here. Special thanks to Gary Carr, an excellent media rep at Hanley Wood, for forwarding the article link to me.

Let’s say you have a new company. It’s got all the elements of a good brand, but no one knows about it. What’s the best way to break into the market – advertising or PR?

If you answered PR, you’d be right.

Why?

1. Because it’s new, you probably have a great story to tell about the brand. Why you created it, the benefit it provides, etc.
2. PR is going to be more cost-effective than advertising, even in a smaller local markets. This can be a significant consideration for a start-up brand that may have a limited marketing budget.
3. Advertising builds effectively over time, but it’s costly. So, unless you’ve got deep pockets, you’re not going to launch a new brand with extensive advertising. PR is going to be much cheaper and more effective with the initial brand launch.
4. Another subtle benefit of PR is the implied endorsement of your brand from the media that runs a news story about it. This is very powerful and you just can’t buy that kind of influence.