#Advertising

Deep dive

Imagine there is a small machine on your office desk. You insert one dollar into this machine, press a few buttons, and—like magic—more money comes spewing out.

The money-making machine turns your $1.00 into $1.10, $1.35, $2.19, or $13.81. It all depends on the buttons you press. Nearly every combination of buttons will produce at least $1.00 in exchange for your bill. It’s almost failsafe. On rare occasions, you might put in a dollar and get 72 cents back. If you’re smart, you’ll write that combination down and never press it again.

If you’re really smart, you’ll log the output of every combination of button presses and try to crack the code. You will feed in dollar after dollar, faithfully inputting your most money-multiplying combo. And, you will dedicate some resources to testing new combinations, in the eternal quest for greater ROI. You put in money, more money comes out. You get better at cracking the machine’s code and even more money comes out.

Here’s the question: would you ever stop putting money in the money-making machine?

Even if every $1.00 “only” turned into $1.12, would you really stop pressing the buttons? Would you walk away from the free money? Would you build your business, amass your resources, and grow your audience based on this otherworldly technology… and then, for some reason, decide to pull the plug? Of course not. That would be business and financial suicide. 

If it’s not obvious by now, the money-making machine is advertising.

And yet, we encounter people every day who try to throw away their money-making machine. You invest money, and that money multiplies. It brings in sales, clients, prospects, new business. Whatever you’re after, advertising is the key to growing your business.

Yet there’s this pernicious, money-killing myth: someday you can turn the money-making machine off.

And…. then what? No one explains that part. Just, kind of, coast off past performance?

Do you know of any successful brands who adopt that “strategy?” Who is big enough to say goodbye to advertising? Apple? They’re worth north of $1.3 trillion dollars. They generate around $250 billion in revenue each year. Nearly everyone is familiar with their name, their logo, and their brand. Surely if anyone has ascended beyond the need for advertising it is Apple.

And yet, Apple spent $1.8 billion on advertising in 2015. (They have since decided not to disclose their advertising budget. Why? Because it’s so important, they want you to know as little about their strategy as possible.)

If even Apple relies on a consistent, growing investment in advertising, why would any company ever think they can just walk away from it? Makes no sense.

For another example, consider Marvel Studios’ Avengers cinematic universe.

Its culminating film, Avengers: Endgame, released with a record-shattering $200 million marketing budget. For context, the entire budget for Guardians of the Galaxy—the actual film, not just its marketing—was $170 million.

As the final film in a series that has generated billions of dollars in revenue and gained more market-share and global popularity than most franchises could ever dream of, you might be tempted to think Endgame would have less need for a massive marketing campaign. But you would be wrong. In fact, you would misunderstand advertising entirely.

What Apple and Marvel Studios see is clear: advertising is a money-making machine.

You must put money in to get money out. There is never, ever a time when you are big enough, popular enough, successful enough, or wealthy enough to throw away the money-making machine. 

For as long as your business thrives, you will—you must—invest in advertising. Get rid of the money-making advertising machine and you may as well just insert that $1.00 bill into the paper shredder, because that’s where your company is heading.

Need Help Finding Your Way in the Digital Space? 

SBA Small, Disadvantaged, Minority-Owned Business
NAICS: 541613, 519130, 541910, 541618, 541820, 561422
Share This