How to research and evaluate your competition?

A great step to consider when creating your advertising strategy and planning the extent of your advertising budget, is to learn what your competitors are doing.

Here are a few guidelines:

• Do you see ads of your competitors in the local newspaper regularly? If so, call the newspaper and ask for the retail display-ad rate in order to find how much the competition is spending in advertising.
• Do you hear competitor’s radio commercials frequently? Call the radio station’s sales department and ask about its ad rates. A salesperson will likely tell you accurately what your competition is spending so he can talk you into doing the same advertising effort.
• Does your weekly mail bring brochures or coupons from your competition? Again, visit the vendor of the mail pack and give her these coupons to learn what those ads cost.

Why should you need to know what your competition is spending in advertising? Because this information provides you some basis for planning your own advertising budget.  Forewarned is forearmed, which in this case also means that gathering information about the other competitors helps you make a measured judgement as to how much you have to spend in order to compete effectively with them. If you own a mom-and-pop diner, you may have a tough time gathering enough budgets that can compete equally with the monster-size restaurant – but don’t panic.  Simply outspending the other competitors (or even attempting to keep up with them) is not the complete answer.

You may be happy to know that you can spend a lot less in advertising than your competition and still make more of a lasting impact by being more imaginative and creative with both your media buying and your message. You can make up for a lack of capital with an abundance of diligent media negotiation and creativity. You can also make your usable advertising budget stretch if you don’t throw any of it away on irrelevant media platforms that brings you insignificant business opportunities.

Regardless of the limits of your advertising budget, and whether you are trying to reach broader audience and prospective buyers, accept this as a given: You can afford to advertise in mass media. The media may, initially, appear to be costly. But, regardless of the advertising expense (which may be a lot less than you think), when you want to reach many people, it’s the smartest way you may spend your money.  What you cannot afford to do is fritter away a small ad budget on refutable media, like the a bunch of ads you get in your mailbox each day, that are better suited for wrapping vegetables than they are for attracting new buyers to your business.

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