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How To Make the Business Case for Your Advertising Budget

Advertising is an essential function for nearly every business. It creates sales, improves revenue, and creates awareness for the brand. Why, then, do so many executives fail to provide an ample advertising budget? All too often, we hear from frustrated business owners who struggle with lead generation or customer retention—both problems that are easily solved with advertising.

So, where’s the disconnect? The problem, of course, is that advertising is often seen as a discretionary expense. Not enough money? Cut the advertising budget. Company struggling financially? Cut all discretionary expenses—that includes advertising. New businesses sometimes completely forget to include a line item for advertising, then wonder why they’re struggling with sales.

The truth is that advertising isn’t just necessary; it’s arguably the most necessary budgetary expense. Why? Because it affects all other aspects of the business. Here’s how.

1. Advertising Increases Brand Awareness

First, let’s consider the most important function of advertising: brand awareness. Without advertising, no one knows who you are! Even established, reputable companies struggle with brand awareness if they fail to advertise. New businesses are often competing with much bigger fish, and advertising can be the difference between sinking or swimming.

People can’t possibly purchase your service or product if they don’t know you exist. On the other hand, studies show that consistently advertising your brand across multiple platforms increases your sales by as much as 23 percent. That’s a massive impact for a small amount of effort.

2. Advertising Affects Your Customers’ Behavior

Advertising is much more than ads and commercials. It requires strategy and thought. A great ad campaign targets a specific demographic and has a specific goal in mind. If you want consumers to talk about your product, you need advertising. If you want them to purchase your product, you need advertising. And, if you want consumers to believe in your company and have faith in your product, you need advertising.

3. Advertising Establishes Your Reputation

Research shows that advertising helps establish your brand’s reputation. Why? No one knows exactly. It makes sense, though. If you repeatedly tell someone that you’re trustworthy and reliable, they’ll eventually believe you. Of course, a great product or service helps, too, but advertising is the best place to start.

4. Advertising Affects Your Bottom Line

Companies are always worried about the bottom line—and why shouldn’t they be? This single number reflects the total value of your business and your worth to potential investors. Advertising can make that number grow. How? Sales, of course!

Sales are the ultimate goal of any marketing strategy. Sure, customer retention is great and brand awareness is good, too, but why do these things matter? Because they all lead to more sales. 94 percent of LinkedIn’s top salespeople said marketing affects their sales.

Even companies that struggle with expenses can succeed with strong sales. A good marketing team is focused on ad ROI. They can turn each budgeted dollar into even greater amounts of revenue—with an average of $11 for every $1 spent on digital advertising.

5. Advertising Gives You Complete Control

You can’t control your customers or what they say about your company. You can’t force people to visit your website or open your door. You can control your advertising, though. Advertising is one of the few things you can control about your brand’s image. You may as well give it all you’ve got.

If you want to seem honest and friendly, make that a goal of your marketing strategy. People-centered and powerful? You can do that, too. Effective advertising is much more than most people realize. It’s persuasive and intuitive. It encourages people to see your company as you see your company. You can create any brand you like, then push that vision to consumers through your advertising.

6. Advertising Helps You Keep Up With Competitors

There’s one more reason why you need advertising: Your competitors are doing it.

Your product may be the best one on the market, but if you don’t advertise and your competitors do, you’re missing sales. They’ll be the ones targeting customers, promoting their products, and building brand awareness. Your customers will wonder where you’ve gone and why they never hear your latest news.

Final Thoughts

If you’re trying to cut corners, the advertising budget isn’t the place to do it. It’s better to boost your ad budget and create a strong campaign that increases your sales instead. Whichever medium you choose—digital advertising, print, radio, podcasts, television, or a combination—you can leverage your advertising dollars to build your brand, drive sales and increase your bottom line.