Presentation covers content from NAA’s 2010 Newspaper Advertising Planbook

Your SpeakerYour Speaker

• Nate Kristy Market Development Manager Nate Kristy, Market Development Manager at The Atlanta Journal-Constitution | Cox Media Group

• Consults and collaborates with local businesses on strategic marketing businesses on strategic marketing campaign development Head shot image

• 10+ years experience in B2B and B2C marketing across a variety of business sizes and industries in the Atlanta marketsizes and industries in the Atlanta market

Why Build A Marketing Plan?Why Build A Marketing Plan?

• Serves as your business roadmap. • Invokes analysis of your business

Why Build A Marketing Plan?Why Build A Marketing Plan?

• Invokes analysis of your business, customers and competitors.

• Helps define your objectives, tactics and timingand timing.

• Uncovers best media for your budget and needs.Positions you to understand return on • Positions you to understand return on investment (ROI).

Manta, an online community for promoting and ti ll b i tl f d th t connecting small business, recently found that

nearly half (47%) of polled small business owners have prioritized marketing and sales as their top spend.p p

Source: Manta Pulse of Small Business 2011 Survey

Getting Started On A Plan

Draft a “big picture” document with annual

Getting Started On A Plan

Draft a big picture document with annual, quarterly, monthly goals.Study your sales trends/cycle/history –y y y yallocate ad dollars and strategy accordingly.Analyze your inventory – consider promoting items based on time of year promoting items based on time-of-year demand, product cycles/lines, etc. Set a schedule to revisit plan and repeat p panalysis.

Critical Components

• Your customers/target market

for Analysis

g• Your competitors• Your selling environment

Y d t / i • Your products/services Including key timeframes for creating awareness and pricing strategy.

• Your advertising budget • Suggested Min. = 3% of gross sales• Your key messages for consumers• Your key messages for consumers.

Marketing Pitfalls & Mi tiMisconceptions

• “I don’t have a target audience.”• “I can save some money if I do advertising myself.”• “I ran an ad, it didn’t work.”

“Wh t’ ll t ti ?”• “What’s a call to action?”• “I don’t need a budget.”• “I spend where I get the best rate ”• I spend where I get the best rate.• “I can do one ad that appeals to everyone.”• “I advertise there because it’s the cheapest.”p

Why Budget for Marketing?Why Budget for Marketing?

• Puts you in control of your spend and ROI.• Saves time. • Makes it easy to eliminate poorly-timed/weaker • Makes it easy to eliminate poorly-timed/weaker

promotions.• Uncovers cost-saving (or free!) ad

opport nities opportunities (e.g. co-op advertising through product manufacturer)

• Generates better consumer response and revenue results!

Budgeting PitfallsBudgeting Pitfalls

Basing it on past habits • Basing it on past habits, personal experience or just whatever ‘cash is just whatever cash is in the register.’

F ili t t t i • Failing to strategize around evolving audiences advertising audiences, advertising options and markets.

Simple Budgeting GuidelinesSimple Budgeting Guidelines

D i j d l d h l • Determine projected sales and then apply a percentage of sales for your advertising.

• Make one budget for your entire company Make one budget for your entire company or create separate budgets for each department/product line.

• Analyze your sales by quarter or month for seasonality, ups and downs, etc. to distribute your , ybudget accordingly.

Charting An Ad BudgetCharting An Ad Budget

Should Look Like NOT Should Look Like… NOT…

Simple Four-Step Ad PlanSimple Four Step Ad Plan

1. Forecast your annual sales.2. Forecast your monthly sales.3. Forecast your monthly

advertising spend.4. Determine ad schedule and

option for each month.

Step 1iForecasting Annual Sales

a. Find the average sales for your industry according g y y gto store square footage (see chart).

b. Determine your store square footage and multiple it by sales-per-square-foot figure.

c. Use resulting figure as your annual sales forecast.

Median Sales Median GLAMedian 

Sales Per Sq Median GLAMedian 

Sales Per Sq Median GLA Median Sales Median GLA

Super Regional Shopping Centers

Neighborhood Shopping Centers

ANNUAL SALES PER SQUARE FOOT OF STORES IN US SHOPPING CENTERS

Regional Shopping Centers

U.S. Super Community / Community Shopping

Type of StoreMedian Sales Per Sq. Ft.

Median GLA in Sq. Ft.

Sales Per Sq. Ft.

Median GLA in Sq. Ft.

Sales Per Sq. Ft.

Median GLA in Sq. Ft.

Median Sales Per Sq. Ft.

Median GLA in Sq. Ft.

General Merchandise $166.70 137,000 $137.95 114,000 $149.50 20,000 $102.97 8,000Food $431.81 1,000 $462.27 1,100 $412.21 39,400 $430.05 32,000Food Service $628.27 800 $568.97 1,100 $314.12 2,400 $266.65 1,800Clothing and Accessories $366.18 3,700 $347.11 4,000 $232.68 4,600 $155.59 4,000Shoes $359.63 2,300 $344.36 2,700 $192.73 3,300 $141.51 3,000Home Furnishings $370.03 3,600 $325.57 8,600 $209.28 6,700 4,200Home Appliances/Music $371.82 3,100 $414.66 3,500 $302.20 2,600 2,400Building Materials/Hardware $388.65 8,100 4,100

$ $Automotive 21,000 $237.92 6,000 $386.92 4,000Hobby/Special Interest $395.04 2,200 $384.05 2,200 $219.85 3,200 $199.45 1,700Gifts/Specialty $287.22 2,500 $206.32 4,000 $170.42 4,500 $127.08 4,000Jewelry $958.99 1,300 $902.40 1,200 $303.37 1,600 $317.37 1,500Liquor $396.27 3,100 3,200Drugs $341 40 6 800 $429 07 11 000 $429 47 12 500Drugs $341.40 6,800 $429.07 11,000 $429.47 12,500Other Retail $496.64 1,200 $401.25 1,700 $247.53 2,000 $217.25 2,100Personal Services $302.17 1,200 $262.55 1,500 $176.87 1,500 $162.50 1,400Entertainment/Community $94.11 19,600 $77.46 26,300 $76.61 4,200 3,000Financial 60 1,400 2,300 1,500Source: Dollars & Cents of Shopping Centers / The SCORE 2008, Urban Institute, 2008.pp g / , ,Square‐foot figures (rounded to nearest hundred).

Definitions:Gross Leasable Area (GLA) ‐ the total floor area designated for the tenants' occupancy and exlcusive useSuper‐regional shopping center: typical mall, usually about 1 million square feet, with three or more large anchor storesRegional center: smaller mall, typically 500,000 square feet with one or two anchor storesCommunity center: strip center with 100,000 to 300,000 square feetNeighborhood center: typical strip center, built around a supermarket, with a norm of less than 100,000 square feet

Step 1: Forecasting Annual SalesK i F il J l SKristy Family Jewelry Store

a. Average Sales Per Square Foot (Per Chart)$317.37

b St S F t (M d)b. Store Square Footage (Measured)60 x 25 Ft. = 1,500 Sq. Ft.

c Annual Sales c. Annual Sales $317.37 x 1,500 = $476,055

Step 2iForecasting Monthly Sales

a Use chart to get the monthly a. Use chart to get the monthly percentage by store type; multiply each month’s multiply each month s percentage by the forecasted annual sales figure from step 1.

b. Resulting figure is your monthly sales forecast.

c. Repeat for each month.

TOTAL RETAIL SALES BY TYPE OF STORE

Store Type JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DECAppliances, TV and Other Electronics Stores 8.0 8.1 7.7 7.3 8.2 7.9 8.1 8.4 7.4 7.1 9.4 12.4Automobile Dealers 8.6 9.0 9.9 9.3 9.5 8.7 8.7 8.9 7.7 6.9 6.0 6.7Automotive Parts, Accessories and Tire Stores 7.4 7.6 8.2 8.4 8.7 8.8 9.0 8.6 8.4 8.9 7.9 8.1Beer Wine and Liquor Stores 6 7 7 0 7 5 7 6 8 7 8 3 8 9 8 8 8 0 8 5 8 6 11 3

TOTAL RETAIL SALES BY TYPE OF STOREPercentage of Year's Sales Each Month by Type of Store

Beer, Wine and Liquor Stores 6.7 7.0 7.5 7.6 8.7 8.3 8.9 8.8 8.0 8.5 8.6 11.3Bookstores 13.5 6.8 6.0 5.9 6.8 6.3 6.6 14.5 8.9 6.2 6.2 12.1Building Materials and Supplies Dealers 7.1 7.0 7.9 9.2 9.9 9.4 9.5 8.7 8.5 8.7 7.2 6.9Clothing Stores, Family 6.3 6.7 8.0 7.6 8.5 7.8 8.5 9.1 7.3 8.0 9.5 12.8Clothing Stores, Men's 7.2 7.1 8.1 8.4 9.0 8.5 7.4 7.9 7.6 8.0 8.5 12.2Clothing Stores, Women's 6.6 7.2 8.7 8.9 9.4 8.3 7.7 8.1 7.9 7.9 8.5 10.9Computer and Software Stores 8.0 7.9 8.2 7.5 7.4 7.9 8.0 8.1 7.4 7.7 9.3 12.7Computer and Software Stores 8.0 7.9 8.2 7.5 7.4 7.9 8.0 8.1 7.4 7.7 9.3 12.7Department Stores, Conventional and National Chain 6.4 7.2 7.9 7.7 8.4 7.7 7.4 8.0 6.9 7.6 10.1 14.7Department Stores, Discount 6.9 7.2 8.0 7.4 8.4 8.2 8.0 8.4 7.0 7.9 9.6 13.1Drinking Places 7.2 7.4 8.3 8.1 8.6 8.4 9.4 9.2 8.4 8.6 8.1 8.4Furniture Stores 8.6 8.7 8.7 8.3 8.8 8.0 8.4 8.9 7.9 7.7 7.9 8.0Gasoline Stations 7.7 7.5 8.4 8.7 9.7 10.0 10.3 9.7 8.9 8.0 5.9 5.1Grocery Stores 8.1 7.8 8.3 8.0 8.7 8.3 8.7 8.6 8.1 8.4 8.4 8.6yHome Furnishing Stores 7.6 7.4 7.9 7.9 8.5 8.4 8.9 8.4 7.9 8.2 8.8 10.2Jewelry Stores 6.1 8.8 7.1 7.0 9.3 7.4 7.5 7.7 6.6 6.9 7.9 17.7Pharmacies and Drug Stores 8.3 8.2 8.4 8.1 8.5 8.1 8.2 8.1 8.1 8.5 8.1 9.4Restaurants, Full Service 7.7 7.9 8.6 8.2 8.9 8.5 8.6 8.9 7.9 8.2 8.0 8.6Restaurants, Limited Service 7.7 7.7 8.4 8.3 8.8 8.5 8.8 8.9 8.1 8.5 8.0 8.3Shoe Stores 6.5 7.5 8.6 8.3 8.9 7.9 8.2 10.7 7.3 7.7 8.1 10.3Sporting Goods Stores 6.3 6.6 8.1 8.1 8.9 9.3 9.0 9.7 7.4 6.7 7.6 12.4Warehouse Clubs and Superstores 7.3 7.5 8.1 7.7 8.8 8.4 8.4 8.6 7.6 8.1 8.9 10.6Source: Monthly Retail and Food Service Sales, 2008 Sales, http//www.censusgov/retail/mrts/www/data/excel/mrtssales92‐09.xls

Step 2: Forecasting Monthly SalesK i t F il J l StKristy Family Jewelry Store

a. January Percentage of Year’s Sales (Per Chart) = 6 1%6.1%

b. Annual Sales (Per Step 1) = $476,055 c. Monthly Sales

Jan: $476,055 x .061 = $29,040(Repeat for Each Month through Dec)(Repeat for Each Month through Dec)

Step 3Forecasting MonthlyForecasting Monthly

Ad Investment

a Find corresponding ad to sales ratio for your store/industry a. Find corresponding ad-to-sales ratio for your store/industry (see chart).

b. Multiply your forecasted sales per month by the ratio.b. Multiply your forecasted sales per month by the ratio.c. Repeat for each month.

% of Annual Sales  % of Annual Sales  % of Annual Sales  % of Annual Sales ADVERTISING TO SALES RATIOS

Commodity or Class of BusinessSpent on 

Advertising Commodity or Class of BusinessSpent on 

Advertising Commodity or Class of BusinessSpent on 

Advertising Commodity or Class of BusinessSpent on 

Advertising

Air Courier Services (1) 0.9%Engineering, Accounting, Research, Management and Related Services (1) 0.2 Jewelry Stores (1) 5.4 Shoe Stores (1) 2.3

Amusement and Recreation Services (1) 5.0 Family Clothing Stores (1) 1.9 Leather and Leather Products (1) 2.1 Skilled Nursing Care Facilities (1) 0.4

Apparel and Accessory Stores (1) 5.2 Furniture Stores (1) 8.7Lumber and Other Building Materials (Retail) (1) 1.7 Sporting Goods Stores (6)

Appliance and Electronics (2) Grocery Stores (1) 0.8 Malt Beverages (1) 10.0 Full Line, <$2 Million 2.0pp ( ) y ( ) g ( ) , $

Appliance Dealers  3.2Hardware, Plumbing, Heating Equipment (Wholesale) (1) 0.1 Mortgage Bankers and Loan Correspondents  1.3 Full Line, $2 ‐ $5 Million 1.6

Electronics Dealers 3.8 Hardware Stores (4) Motion Picture Theaters (1) 1.0 Full Line, >$5 Million 2.6Appliance and Electronics Dealers 3.4 <$500,000 2.4 Musical Instruments (1) 2.2 Specialty, <$500,000 3.3Auto Dealers, Gas Stations (1) 0.8 $500,000 ‐ $1 Million 2.7 Office Furniture, Excluding Wood (1) 0.6 Specialty, $500,000 ‐ $999,999 2.7Auto and Home Supply Stores (1) 1.9 $1 ‐ $2 Million 2.5 Office of Physicians (1) 1.2 Specialty, $1 ‐ $2 Million 2.6Bakery Products (1) 0.7 >$2 Million 2.2 Ophthalmic Goods (1) 3.5 Specialty, >2 Million 3.0Beverages (1) 6.7 Hobby, Toy and Game Shops (1) 2.9 Paints, Varnishes, Lacquers (1) 2.1 Television Broadcast Stations (1) 8.3

Bicycle Dealers (3) 3.1 Home Centers (4) Perfume, Cosmetic, Toilet Preparations (1) 19.2 Tires and Inner Tubes (1) 2.2

Books, Publishing and Printing (1) 3.8 <$2 Million 1.3 Photographic Equipment and Supplies (1) 1.4 Tobacco Products (1) 4Building Materials, Hardware, Garden (Retail) (1) 2.1 $2 ‐ $3 Million 1.0 Racing, including Track Operations (1) 3.3 Variety Stores (1) 1.5

Cable and Other Pay TV Services (1) 7.3 $3 ‐ $6 Million 1.1Radio, TV and Consumer Electronic Stores (1) 2.4 Video Tape Rental (1) 4.7

Carpets and Rugs (1) 0.8 >$6 Million 0.8 Real Estate Agents and Managers (1) 2.7 Women's Clothing Stores (1) 3.7Catalog, Mail‐Order Houses (1) 3.5 Home Health Care Services (1) 1.1 Restaurants (5)Child Day Care Services (7) 0.9 Hospitals (1) 0.6 Full Service, <$15 2.0Computer and Office Equipment (1) 0.6 Hotels and Motels (1) 1.4 Full Service, $15 ‐ $24.99 1.8Convenience Stores (1) 0.1 Household Appliances (1) 1.9 Full Service, >$25 2.2

Department Stores (1) 5.1 Household Audio and Video Equipment (1) 6.5 Limited Service 1.6Direct‐Mail Advertising Services (1) 1.7 Household Furniture (1) 6.1 Security Brokers and Dealers (1) 0.5

Drug and Proprietary Stores (1) 0.7 Insurance Agents, Brokers and Service (1) 0.4g p y ( ) g , ( )Educational Services (1) 12.8 Investment Advice (1) 1.6Sources

(2) North American Retail Dealers Association, Cost of Doing Business Survey Report, 2007(3) National Bicycle Dealers Association, The Cost of Doing Business, 2006‐2007(4) National Retail Hardware Association, Cost of Doing Business Study, 2007(5) National Restaurant Association, Restaurant Industry Operations Report, 2007‐2008(6) National Sporting Goods Association, Cost of Doing Business Survey, 2006‐07(7) Schonfeld & Associates Inc Advertising Ratios & Budgets June 2007

(1) Schonfeld & associates Inc. Advertising Rtes & Budgets, June 

(7) Schonfeld & Associates Inc. Advertising Ratios & Budgets, June 2007

Step 3: Forecasting Monthly Ad InvestmentKristy Family Jewelry Store

a Ad ertising to Sales Ratio (Per Chart)a. Advertising-to-Sales Ratio (Per Chart)5.4%

b Forecasted Sales Per Month (Per Step 2)b. Forecasted Sales Per Month (Per Step 2)Jan: $29,040

c Monthly Ad Investment c. Monthly Ad Investment Jan: $29,040 x .054 = $1,568(Repeat for each month.)( p )

Step 3 AlternativeOne-Minute Budget TestOne-Minute Budget Test

Results Interpretation:

• 4-7 Points Approx. 3-4% of sales.

• 8-11 Points Approx. 4-5% of sales.

• 12 Points Approx 5-7% of sales• 12 Points Approx. 5-7% of sales

Step 3 Alternative: 1-Min Budget Testi i

Results Interpretation:

Nate’s Window Installation

3

Results Interpretation: 4-7 Points = 3-4% Sales

8-11 Points = 4-5% Sales.3

3

12 Points = 5-7% of Sales

Nate’s budget should be 1 g4-5% of estimated

or previous year’s sales.9

2

9

Sample 4-Step Ad Plan ChartSample 4 Step Ad Plan Chart

M thl % Monthly Monthly %

f A l Ad Monthly

Monthly % Annual Sales

Step 2

yStore Sales (Annual Sales x

Column 1)

of Annual Ad Spend (Step 3)

yAd Budget

(Column 2 x Column 3)

January January February

March Q1 Totals Q

Sample 4-Step Ad Plan ChartKristy Family Jewelry Store

M thl % M thl Monthly % f A l Ad M thl Monthly %

Annual Sales ($476,055)

Monthly Store Sales ($68,552 x Col 1)

of Annual Ad Spend

(Col 2)

Monthly Ad Budget

(Col 2 x 3)January 6.1% $29,040 5.4% $1,568January 6.1% $29,040 5.4% $1,568February 8.8% $41,893 5.4% $2,262

March 7.1% $33,800 5.4% $1,825Q1 Totals $104,733 $5,655Q $ , $ ,

Step 4Determining Monthly Determining Monthly

Ad Scheduling

• Choose an advertising consultantPreferably one with multi-media capabilities and local market capabilities and local market knowledge.

• Write out your monthly y yad plan on a year-long calendar.

• Execute!• Execute!

Key Considerations ifor Monthly Planning

When?• Popular paydays (e g Social Security major companies etc ) • Popular paydays (e.g. Social Security, major companies, etc.) • Heavy store-traffic days and/or those with special hours.• In synch with national/local merchandising events (i.e. co-op opportunities)• Around known flux in prices and inventory.

Why? • Ad frequency builds awareness• Your competitors are doing it – or doing it better.• You’re expanding products or departments• You re expanding products or departments.

What Else?S i i i f d i i di ( i li di k i )• Strategic integration of advertising media (print, online, direct marketing, etc.)

Learn MoreLearn More

• Nate Kristy, Market Development Manager @ AJC: Nate Kristy, Market Development Manager @ AJC: nkristy@ajc.com

• ajcmediakit com• ajcmediakit.com• NAA.org

• advertising.yahoo.com