Tag : marketing-budget

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196: Auctioneers Are Braver Than I Am

On the day this post publishes, I’ll be in Antarctica—hopefully ascending an ice-covered mountain. Right before I left home, one of my closest friends was praying aloud for my journey and declared, “This trip is so Ryan.” Not only do I think heaven already knew that, but most of you probably do, too.

What you probably don’t know, though, is that my clients are braver and more adventurous than I am. First: most of them are parents. That’s some high-stakes stuff bigger than any bungee jump or sky dive. Second, most have employees. After my wife developed a successful staffing agency years ago, she confirmed that I’m not cut out for that adventure. More to the point: all of my clients work on speculation. They take projects not knowing how big their paycheck will be or, in some cases, whether there will even be a paycheck on the other end of the deal.

That takes some serious guts, a risk-taking ability I don’t have.

Even though I’m not brave enough for that gamble, I try to grasp the weight of that, the stress of that. Frankly, I’m amazed at the grace many of these auctioneers show in the process—especially when there are two commas in the estimated gavel price.

Between you and me, I absorb some of that stress. I recognize that my clients are performing on a high wire that’s exposed to swirling, cultural winds. They have to be more efficient than ever in a marketing landscape with more media outlets, more subcultures, more competition, and more educated buyers than ever in human history. Along with that, my contribution directly impacts their livelihood. That responsibility makes me really want their advertising to work.

Sadly, though, I can’t always make their advertising work. Here are four of the reasons that sometimes happens.

What works might be something neither of us knows yet.

There are a lot of media and technologies with which I don’t have experience. Same goes for my clients. That includes options already in the marketplace and the ones that demand will soon bring to the marketplace. Some are niche outlets for unique assets. Others are entire platforms that will change how we interact with prospects. Yet others are entities in a particular asset or geographic market that our prospects know but we don’t.

Google can help some with the ignorance, as can interviewing the seller. Oftentimes, adding capability will mean adding vendors, who each specialize in their niche craft. Discovery of new techniques and new media requires experimentation, but that exploration may not help the auction at hand. That’s why almost every auction budget should include some testing of new techniques.

What works might cost more than we have budget to execute.

Sometimes, the best way to reach potential buyers isn’t feasible because of the asset value and the ensuing advertising budget. We can’t take the asset on a world tour like Christie’s can with a nine-figure painting. Maybe a mailing list and postage are out of reach, maybe high-profile billboards, maybe telemarketing, maybe the magazine or news site the right prospects read. Surprisingly enough, I’ve regularly seen where there was somehow no money in the budget even for Facebook, one of the least expensive tools in today’s advertising tool box.

To avoid all of this, the potential buyer needs to be identified before contract signing; and the media necessary to reach them needs to be determined before the budget is set. If you sell the same asset category on a regular basis, you can do that by consulting your buyer acquisition formulas.

What works often isn’t what I’m asked to create.

Regularly, I can’t help an auctioneer find motivated bidders because they aren’t asking me to do so. They’re asking me for something else. I’m not offended by that. I make a significant part of my income each year, generating media that:
• isn’t independently tracked for efficacy or efficiency,
• has little-to-no distribution plan [not even kidding],
• is a last-ditch, hail Mary pass at the end of an unsuccessful or even non-existent campaign, or
• is less likely to work because of its messaging, visual content, and/or emphasis

The tension for me is the balance between (A) submissively making money and (B) pushing back or asking questions that would cost me income. I’ve swayed often from one side of that continuum to the next, and I’m still trying to find the right balance.

The market may not want what we’re selling right now—or at least at the price we’re attempting.

Even the best advertising doesn’t work, if there isn’t a buyer in the marketplace to respond to it. Buyers drop out when the market is flooded with cheaper alternatives, when technology has moved on, when repair or maintenance makes even a free asset expensive, or when location of the asset or the likely buyer is a liability. Finally, there may be potential buyers but none who are comfortable with the terms and/or the process of an auction purchase.

So, market evaluation before signing an auction contract may be the most important part of the promotional campaign. Sometimes the best advertising for a brand is the advertising not wasted on projects that should be declined.

Thankfully, these four scenarios are more exception than rule; and we’re surprising sellers with superlative results on a regular basis. The desire to maintain that success challenges me to keep learning and adapting and passing along what I learn. The residual results provide for me to chase the smaller adventures you see in my Facebook posts—while I try to keep up with your professional example.

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194: The Right Marketing Questions at the Wrong Time

I need to get better at asking questions of my clients earlier in the advertising process. Sadly, I often struggle to focus on the marketing strategy instead of billable tasks.

I can’t tell you how many times I’ve gotten a direct mail piece designed for a client and then asked them for the mailing list—only to learn that they do they not have a mailing list and don’t know to whom they will mail it. Or right before I dive into some Facebook ads, I’ve realized I forgot to ask, “Who do you want to target?”

I’m apparently not alone in my absentmindedness, because a common response is: “I don’t know. What do you think?”

On the times when I’m actually on my marketing game early in the process, I’ve asked the auctioneer, “Who’s our buyer? What’s our prospect profile?”

“Well, I was hoping you could help me with that.”

Mind you, this is after the auction contract was signed. That means auctioneers are booking deals in new asset and/or geographic markets without knowing who their prospects are, let alone which media they need (and in what proportion) to reach targeted potential buyers.

The problem with this tardiness is that the buyer determines the advertising campaign.

The prospect guides where we have to advertise—in terms of both media type and geographic area. That profile dictates what kind of impression we need to make, and that (along with asset value) governs the budget.

So, how is it that so many auctions are booked and budgets are set before anyone asks, “Who is the buyer?”

Right Questions at the Wrong Time

Some of it might be too much trust in “the sound that sells”—the idea that auctions in and of themselves get stuff sold, regardless of asset. While an auction is a great vehicle for transactions of a myriad of items, there is no auction without bidders. So, the most important part of the auction marketing process is the attraction and accumulation of bidders.

To do that, we have to stop thinking like auctioneers or real estate agents or salespeople—or graphic designers. We have to get into the heads of the people who would want what we’re selling. Often, that’s the most difficult part of the process—for both my auctioneers and their advertising vendor. If we personally wouldn’t buy that asset, we have to research who would. We need to have a good idea what they need, and what motivates them.

Why would someone want farm equipment with this age and these hours?
Do hunters check their Facebook during hunting season? (And when is deer season where this land is?)
What kind of consumer is looking for an unfinished condo unit?
Where do subdivision developers search for new opportunities?
How far would someone travel to purchase from an on-site estate auction or pick up from an online auction?
What would convince a real estate investor to buy farmland instead of residential properties?
How much disposable income would someone need to purchase this asset?
For what other industries could this commercial equipment or real estate be used?
Are we building any media only to impress the seller instead of buyers?

These questions speak to buyer motive, media mix, and targeting options. Their answers help us write headlines and select demographic criteria. The followup questions to the examples above would further focus our advertising and make our budget more efficient—even if it means spending more money on fewer people to attract an action from them.

It doesn’t cost you money to ask these questions.

In fact, it might cost you significant money if you don’t ask these questions—especially if you don’t ask them before you sign the auction contract. Save yourself some headaches. Take the prescription four out of five TV doctors recommend: ask two of these questions, and then email your advertising vendors in the morning.

Stock image purchased from iStockPhoto.com

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182: How to Know What Your Auction Advertising Budget Should Be

Click on any of the illustrations below to enlarge them.

If you read business news, you run into the term “big data” on a regular basis. I used to associate it with corporations mining our transactional histories to extract scary quantities of data for creepily-predictive advertising.

After teaching part of the Auction Marketing Management course for a couple years, though, I get inspired to help small businesses use the same processes with the information they already have.

Auction companies, in particular, have some incredible, free knowledge. With a few minutes’ worth of work, that knowledge can become predictive power; and that power can help you convince more and better sellers that you are their best option. It just takes asking a few questions and recording those answers.

How many buyers did you have in your latest auction?

Number of Bidders

Along with that, how many bidders did you have in that auction?

Number of Buyers

Divide the number of bidders by the number of buyers. This will tell you how many bidders you needed to get to each buyer.

Bidders Per Buyer

Divide this number by the number of lots in your auction. This will tell you the average of how many lots per buyer you needed to get everything sold.

Lots Per Buyer

How much did you spend in advertising on this auction?

Advertising Cost

Divide this number by the number of bidders at the auction. This will tell you the average cost per bidder.

Cost Per Bidder

Of course, it’s easy to then compute your average cost per buyer.

Cost Per Bidder

How many unique visitors did this auction’s page on your website generate?

Web Uniques

Divide this number by the number of bidders. This will tell you how many unique visitors to your website it takes to get a bidder.

Uniques Per Bidder

A quick formula will compute how many website visitors it takes to get a buyer, too.

Uniques Per Buyer

If you’re curious, you can divide your advertising expense by the number of unique visitors to see what your cost per website visitor was.

Cost Per Unique

Now, keep track of these fields for every auction this year. (It should take only five or ten minutes per auction to fill in the blanks.) To make it more accurate for predictive value, I would keep separate spreadsheets for each asset category. If you operate in multiple states, you might find value in an extra column for that notation, too.

Maybe at the end of the year, all you’ll have is something to pique your curiosity. There’s a decent chance, though, that you’ll have actionable data from seeing patterns.

Like one of my friends, you might be able to tell the auction manager approximately how many bidders to expect based on your Google Analytics numbers the morning an auction closes. Or you’ll be able to tell that the bidder registrations were an anomaly. If there’s post-auction seller discussions, you can show them their results versus your typical results.

When a potential seller asks why you picked the budget figure you did, you can explain, “For the asset type or the number of lots you have, we’ll need to get roughly [x] number of buyers. To get that many buyers, we’ll need to attract about [x] number of bidders, which cost us on average $[x] each.”

If you don’t think that would be valuable information, skip these questions and recommendations. If you think there’s merit to them, I can send you the formula-driven Excel sheet I used to create the illustration above. Just click here to email me, and I’ll send you a free copy.

Stock photo purchased from iStockPhoto.com

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175: How to Get National Advertising on a Local Budget

Have you ever been asked to market anything that had a national appeal, but the asset value didn’t allow a national advertising campaign? It happens to my clients on a regular basis. My advice for that situation has recently changed, as a burgeoning technology helps solves part of that problem.

Let me give you an example.

One of my high-volume clients just booked a deal to sell the furniture, fixtures, and equipment from a two-year-old frozen yogurt shop near Buffalo, NY. Having limited experience with this niche asset category, John called me for ideas on how to attract the most amount of bidders to assets that together were worth only about as much as a new pickup truck. (I had zero experience with this asset type; so, I actually had more questions for him than he had for me.)

Before John called me, he had reached out to our mailing list guy and found a list of thousands of frozen yogurt stores in the country. National List Research was able to split the list into chains and independent operators and even provide the name of an executive for many of them. The bad news: a mailing even just to the independent operators would break his budget.

After a couple phone calls, we hatched a plan.

First, John bought the full mailing list of just the independent frozen yogurt shops along with their phone numbers. At 13 cents per person, that was a small expenditure.

Next, John uploaded that direct mail list to Facebook to create ads to those independent operators. Facebook matched about two thirds of those prospects. John could reach that complete national list of matches for about $20 per ad. So, we planned for a series of ads with different photos and headlines.

Then, John created a lookalike audience of Facebook users who demographically looked exactly like those independent operators.

Using a free Facebook pixel, he also created a list of Facebook users who visited that auction’s page on his website. Then, he had Facebook build a lookalike audience of people who looked just like the people who came to that page on his site. All three of these additional audiences got Facebook ads served to them—again for a small outlay. (John creates these three audiences for almost every auction.)

This YoBerry shop was in a Buffalo suburb; but the Northeast doesn’t have anywhere near as many frozen yogurt shops as the South does. Texas, especially, is chock full of them. John’s budget didn’t allow him to mail to the whole national list, but he didn’t know where the biggest demand would be. So, I recommended he run the first round of Facebook ads and then use Facebook’s and Google Analytics’ geographic reporting tools to see the aggregate data for those who visited the auction’s page on his website. That would tell him which states to select from his list for direct mail reinforcement.

The plan worked. John ended up mailing the postcard I designed to 253 of the 3,000 or so purchased names, saving thousands of dollars in printing and postage. Hundreds of people visited the auction’s page. Grafe Auction found scores of registered bidders from multiple states.

So, here were our takeaways from this low-budget experiment:

• Skip newsprint, unless it’s an asset only with local value.

• Use Facebook to help you sort your direct mail list.

• Leverage lookalike audiences to find the people that list brokers don’t have in their database.

• Implement a Facebook pixel to re-market assets to the original prospects and/or to serve ads to people who look just like your early investigators.

• Follow the data, not your instincts or industry status quo.

This complete process may not work for you, if you don’t offer online bidding of some sort. The individual tools we leveraged, though, are tools we use every day for live and online auctions. In concert, they solve a problem auctioneers regularly face.

Stock image purchased from iStockPhoto.com

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174: 6 Things That Make Your Facebook Ads More Expensive

I regularly get asked to estimate the cost of a potential Facebook campaign off the top of my head. That can be difficult because the cost of advertising on Facebook can vary greatly depending on a multitude of factors. (Even in the same campaign, some ads are drastically more expensive than others.) Because what my clients and I advertise ranges greatly in category, value, and geographic market, the audiences vary accordingly.

Facebook advertising is billed in terms of cost per click (CPC), but that price isn’t uniform. CPC is determined by algorithms and invisible auctions. Ads compete for eyeballs, as Facebook allows only a certain number of ads during a user’s time on the service. Facebook wants ads to be appeal to its users, so that they aren’t annoyed off the platform. Because of this, the world’s largest platform wants paid content to match user interests as much as possible; and engaging ads are rewarded with lower cost per click.

But enough with the ambiguous factors, here are six specific reasons some of your Facebook ads cost more than others.

Unattractive asset

Let’s face it, you wouldn’t buy what you’re selling. You’re just crossing your fingers it sells. Or maybe the item at hand is less attractive to its local area (like a snowmobile in Orlando) or in the current season (like a motorcycle in December). If someone is less likely to purchase something, they are less likely to click on an ad for it. This isn’t a matter of asset value—just asset appeal. I’ve seen ads for small, rural estate sales significantly outperform expensive commercial real estate.

Unappealing copy or photos

You might have a fantastic asset, but the ad copy doesn’t evoke interest in potential buyers. The fault can be the wrong message, too many words, or a missing call to action. Also, the photography could be unprofessionally captured or otherwise underwhelming. It’s not that all images have to be snapped by commercial photographers; they just need to appropriately match the current, reasonable expectations of the consumer public for that asset.

Compressed time frame

Because ads compete for space, forcing them into a small window of time means that Facebook has to push your ads ahead of others with longer timeframes. To win the auction, you have to outbid every other advertiser. So, cutting line costs more. Sometimes, it’s very much worth it, if you are advertising to people at an event: say during the Super Bowl, a car show, or even a competitor’s auction.

Highly-competitive time frame

Certain times of year attract more advertising, because more retailers are advertising their wares. Think: Black Friday. I haven’t tested it, but I would imagine the week of Mother’s Day and Valentines would be more competitive. If you’re going hyper local in a metro area, there might be more advertising during festivals or perennial times of tourist activity.

Your prospect pool and its Facebook habits

Some desired audiences don’t interact with Facebook as often as others. That might be a factor of age, Internet availability, population density, or something else. Or you might be chasing a frequent Facebooker from a specific demographic or geographic area that a lot of marketers are chasing. Either way, supply & demand will make getting in front of them more expensive.

How the ad is optimized

Facebook offers multiple formats for your paid content to be presented. Each is inherently optimized by Facebook for different types of interactions—only one of which is getting people to your website. Also, even those intended for website traffic can be optimized for largest viewing audience, multiple views per prospect, or people most likely to click on links. So, even premium content can be more expensive from a cost-per-click standpoint due to how that content is ordered.

While we should all pursue more relevant ads, it’s important to note that efficiency is a secondary goal to effectiveness. Regularly, in my Facebook reports to clients, the ad that is most effective (got the most clicks) isn’t the most efficient one (lowest cost per click) we used in a campaign. Again, I regularly have huge swings in cost per click in the same campaign, using the same images and headlines.

Some audiences are worth their heftier cost. It only takes one click from the right person to have a buyer and two website visitors to have an auction.

Stock image purchased from iStockPhoto.com.

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170: The Oddest Objection I Get When Consulting

I get a really odd response when I recommend that Facebook receive a sizable chunk of a marketing budget.

“Not everyone’s on Facebook, though.”

I’ve never heard a client declare, “Not everyone gets the newspaper, though.”

I’ve never heard an auctioneer say, “But not everybody opens their mail.”

The irony in my clients’ rebuttals is that Facebook is the most dominant channel in any medium in our country. As of August of 2015, 62% of the adult population and 72% of adults in the country who use the Internet are on Facebook.1 Two thirds of those Facebook users visit the site every day.2

By contrast, the most watched show on TV last year (Sunday Night Football) garnered 6.6% of the nation’s population.3 That’s 10% of Facebook’s daily reach, and it’s available only 17 nights a year. Plus, advertising to that small fraction of people would cost you just short of a firstborn child.

“But older folks aren’t on Facebook.”

64% of Internet users ages 55 to 64 use Facebook.1 Only 44% of Americans ages 55-64 read a newspaper.4 It’s safe to assume the percentage of adults who look through the classifieds of those newspapers would be significantly smaller still.

Not only is the quantity of newspaper subscribers shrinking (7% for daily papers and 4% for Sunday papers—last year alone), so is the quantity of newspapers themselves. A net of 118 U.S. newspapers closed their doors between 2004 and 2014.5 Multiple times in the past couple years, I’ve had to email a client to let them know that a newspaper they requested is no longer in print.

In contrast, the number of mailboxes in America isn’t shrinking; and neither is Facebook’s user base.

“Well, professionals and investors [rich people] aren’t on Facebook.”

2015 Facebook Users78% of on Internet users with household incomes above $75,000 are on Facebook.1 That happens to be the highest percentage of any income bracket.

Facebook will let you filter audiences by income, by net worth, by liquid assets, and by number of lines of credit. I regularly target lists of millionaires and multimillionaires on Facebook and get tons of traffic to my clients’ websites—for both commercial and luxury residential properties.

One of my clients auctioned a medical office building earlier this year. We had a direct mail campaign and ads deployed in local and business newspapers. At the first open house, every single prospect touring the property came from Facebook. They weren’t teenagers or minimum wage workers.

Am I saying advertising budgets should be almost all Facebook?

Absolutely not. No media saturates 100% of your prospect base. It’s good to cover as many bases as you can afford.

What this data should determine, though, is the priority order in your advertising budget. Actually, that hierarchy should be determined more by your internal data than by user statistics and audience size. If you’re polling your bidders at every auction and then tracking your offline & online media in Google Analytics, you’ll be able to tell which media work best for specific asset types in specific geographical locations.

I recently bet a client that, if their winning bidder came from one of a selection of out-of-state newspapers, I’d rebate all of my design fees. I wasn’t promising a bidder from Facebook. I just knew we could reach far more people and a much more targeted audience on the same spend, and I prefer efficient advertising over hail Mary throws. (They agreed.)

Most of the small business folks who object to my bullish stance on Facebook don’t have data to refute my assertions. They’re working off assumptions, anecdotal recollections, and their personal habits. (“I never get on my Facebook.”) Auctioneers who do test and measure and analyze have been moving more money to Facebook, Google, direct mail, and signs—away from newsprint.

I’m not telling you how or where to spend your money. I’m just letting you know that neither you nor I can trust our assumptions.

Stock image purchased from iStockPhoto.com
Chart linked to source.

1 “The Demographics of Social Media Users
Maeve Duggan, Pew Research Center. August 19, 2015.

2. “Facebook Passes 1.65 Billion Monthly Active Users, 54% Access the Service Only on Mobile
Emil Protalinski, Venture Beat.April 27, 2016.

3 “Here’s How Much Ad Time in NFL Games Costs Marketers This Season
Anthony Crupii, AdAge. September 15, 2015.

4 “Newspapers: Sunday Readership by Age
Pew Research Center

5 “Newspaper Fact Sheet
Michael Barthel, Pew Research Center, June, 2016.

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