December 21, 2009

Budget investment advertising when something is new

We often get inquiries from start-up products or companies and new programs in general. Usually the second thing to come out of their mouths after they tell us how much they invested in development is that there is little or no money for advertising. They call us because they are having market penetration problems. They all expect a press release to do the trick. Then, they want the agency to be "co-investors" with them and work partially on spec.

The lack of knowledge and respect for roll-out advertising is astonishing. It is why so many of these efforts fail and a lot of money is lost as well as the dreams of the creators of the concept. The agency values its product and never becomes a co-risk taker. We let these folks know about a proper level of investment advertising that has a very poor initial ROI but is a necessity if they are ever going to penetrate the market place.

Sadly, the answer is usually negative to our estimates. What follows most of the time is failure to hit the market, let alone stay in it. The lesson is as follows: Budget for investment advertising and give yourself a chance to be known.