Guest Article: Alok Agarwal: Advertising could kill your start-up

Tips on how start-ups can best devise their advertising plan.

Every start-up wants to spend money on advertising. The high dramatic rise of a few start-ups on the back of big budget advertising has emboldened everyone. But, marketing and advertising is really hard and relying on heresy, anecdotes and industry benchmarks can be dangerous.

So, before you spend on advertising, take a short course below, without the jargon.

1. Proliferation of media

Media vehicles (any medium which carries content or advertising is a media vehicle) and options are increasing all the time. This makes it difficult to choose.

2. Increasing wastage

Someone said 50 per cent of what I spend on advertising is wasted. Say, wastage is over 70 per cent. Why? Too much clutter. Papers so laden with ads, it's difficult to find news. Television channels run ads for nearly 30 minutes per hour. Websites contain more ads than content. Paid media, both native and contextual advertising, blurs the line between content and advertising. There are spill-overs of demographics and psychographics. The advertiser pays for it all even if a tiny fraction is relevant. Always measure wastage.

3. Inaccurate data gathering and reporting

Television viewership is measured on a tiny sample size. This sample is insignificant when measuring a particular time slot on a niche channel. Newspaper readership measures familiarity of title. For instance, there is no way to know who saw your ad on page three. Web display data is for page loads and ad loads. Not eyeballs. CTRs thrive on mistaken clicks. Plus, bot clicks and other frauds are perpetrated by sites. For a media publisher, 'seen' equals business. But, for the advertiser only 'bought' equals business.

4. The search paradox

The bulk of online spends are made on search marketing. Various categories fight for the same key word, thus driving up the cost. Further, most visitors cannot differentiate between promoted and organic search results and click-promoted links even after they have typed the website name in the search box.

5. Data in many languages

Data is measured in different units across mediums. Target profiling is not uniform. Impact across different media on consumer influence is unknown. It is impossible to add up impact of various media vehicles in one plan.

Here is a survival guide to make your advertising build your business, not kill it.

1. Know your customer

Talking to few friends and colleagues is not enough. Spend time with your customers every day. Know her better than your mother.

2. Know your market

Who are the existing players of the traditional and modern world? What can you learn from them? What service or habit are you going to replace? What is the right distribution and what are the logistics required?

3. Know your 'product'

'Product' is a physical product or a service. Eventually, it is what consumers buy. Unless the product is truly adding value to their life, differently, they will not buy, despite advertising. What is the new technology? What is the killer app? You can survive for a while with a 'me too' if you have deep pockets, but in the long run, your business will die.

4. Know marketing

If your business is B2C, the most important aspect of success is to know the customer and how to influence him/her to buy -- the essentials of marketing. There is no exact science. That's why a majority of consumer brands ever launched have failed (over 90 per cent).

5. Know your business ability

If your product or service does not measure up, big advertising will kill it faster. More customers more quickly will figure out what is wrong and spread the word.

6. Delay advertising, pick with care

Most people will advise to advertise fast and furious. But, caution will make you win. Advertise when you are dead sure there is tremendous traction for your brand. Sacrifice. Focus on few media vehicles and concentrate.

7. Focus on messaging

Messaging builds perception and image. It builds premium pricing and profitability. Impactful messaging will come from deep understanding of customers and creativity.

8. Video messaging

It is far more effective than text. Products and services deliver functionality. A great video helps build strong imagery.

9. Get contagious

If the combination of your product and message truly appeals to your customer, he/she will share it, forward it and recommend it, even force a friend to buy, for free. Only seven per cent of WOM is created online. Ninety three per cent is still in the 'real' world --over coffee conversations, phone calls and even board meetings.

10. Get good quality advertising partner

Creating demand is the hardest part of a consumer business. Marketing and advertising experts can help.

(The author is an independent consultant and investor)