Episode #3 | Advertising Mix, How Much to Pay, Podcasting Frequency
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Show Overview
One of the topics that all businesses must face is finding the right mix of advertising spend. This week’s episode tackles this subject as well a the topics of determining how much an entrepreneur should pay themselves, and a discussion about podcasting including how often to publish podcasts.
Show Notes
How Much to Pay an Entrepreneur
Mark Taylor is getting VC funding and is at the point where he has to determine how much he’s going to pay himself. It’s a question we hear all the time and something most people seem to struggle with. They’ve been only taking what it takes them to live on and throwing every single spare penny at the business. How do they determine what they should be paying themselves?
This is actually a great question, and the answer is as wide ranging as the number of entrepreneurs asking it. Here are a few things to consider:
- If you are in need of cash to run the business, then you have an obligation to be frugal. Not only on your salary, but also on everything else. If you have to take on partners (and you wouldn’t if you didn’t have to) then its unfair to use their money to live high on the hog before you even prove that you can offer them a return on their investment.
- Having said that, if the business is viable, and you give up a significant portion to a VC, there is nothing wrong with paying yourself “market” wages. Don’t go in there requesting a ton, but being in the lower area of a range for a similar job is a reasonable request. If the VCs don’t like it, they’ll let you know for sure.
- Once your company is profitable, it’s another story. At that point you should definitely be paying yourself market wages. Your investors should be happy to ensure that you are being paid
properly according to your contributions. - If you agree to take a lower than market rate salary now, because the company needs cash, then make sure your salary is actually set at market rate, but you are only collecting a portion now and intend to collect the remainder after the company reaches profitability as deferred compensation. This is entirely fair, and also necessary for tax reasons down the road.
There is also an interesting article over on Entrepreneur magazine’s site called What to Pay Yourself that may be of value.
Advertising Mix
What are the best ways for a business to advertise for it to reach its full potential?
-Jonny Blackler
First of all, I would recommend reading the book The Wizard of Ads
Next, I would highly recommend taking a look at WOMMA, the Word of Mouth Marketing Association. This site is full of examples of ways to promote a product or service for next to nothing!
Having said that, different businesses are going to need to take different routes in terms of their advertising mix:
- Print ads: newspaper, magazine, billboards, yellow-pages – These types of advertising vehicles tend to work best when the product has broad ranging appeal. For example, Coca Cola. Every viewer is a potential consumer. They are not cost effective for selling to a narrowly defined group of prospects.
- Local sports sponsorships: high school football teams, kids soccer teams, etc. – Work very well when the product or service is targeted at a particular community. This type of advertising generates good will for Realtors, restaurants, and other service industries.
- Media: radio, TV, web audio and video – Generally more effective, and also more expensive than their Print ad cousins, especially if you can get celebrities or well known personalities to participate.
- Trade shows: an excellent way to introduce a product to a market, grab media attention, or meet potential investors. But usually doesn’t translate to many direct sales. Trade shows are best for “brand awareness” campaigns.
- Direct marketing. Targeting prospects personally. Examples: phone calls, direct mail, and door-to-door canvassing
- Public relations: A great PR firm can help put vendors and products on the map, especially in a specialty industry. When you hire a PR firm you give specific directions of the places you’d ideally like to appear, and let them handle making it happen.
- Online advertising: the newest and most track-able advertising medium, online ads can not only deliver text, audio, or video, they can also be targeted at a highly selective clientele. Especially effective if combined with Web Analytics such as Woopra.
And let’s not forget, the best possible advertising comes from your own customers. Make them love your product or service, and they’ll brag about it to everyone they know.
Finally, let me end by saying that much of the time the choice of advertising medium is simply not as important as the fact that you are actually doing some advertising. Decades ago, McGraw-Hill published a classic ad depicting a grumpy customer with these classic lines:
- I don’t know who you are.
- I don’t know your company.
- I don’t know your company’s products.
- I don’t know your company’s customers.
- I don’t know your company’s record.
- I don’t know your company’s reputation.
- I don’t know what your company stands for.
- Now…What was it that you wanted to sell me?
The point of the story is that advertising doesn’t work the very first time. Repetition is key, and eventually it sinks in with more and more people. So, choose the most cost effective mechanism, and stick with it.
Podcasting Frequency
3) What’s more important for podcasting? Frequency of shows or longer shows?
- Toby Fairchild
Actually, both frequency and length should be considered for podcasts.
- Given the fact that people have short attention spans, it’s probably a good idea to keep the content fairly short as well.
- If you have a longer subject to tackle you can always break it into short segments and make sure that you put out the most interesting parts.
- Keep in mind that production of a podcast will take around one hour per minute of finished video when everything is finished.
- In terms of frequency, once a month is a bare minimum, but once a week is probably a little better
- Keep an eye on your download stats and make sure that you are publishing as often as your readers want to consume, and also watch the time of day you release to ensure you’re maximizing your audience.
(Image credit Arturo de Albornoz.)
Episode edited by Dave Moyer
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