(Originally published on Friday, December 7, 2007, Pittsburgh Business Times - by Ben Semmes)

Keith Hood likes to plan ahead. As manager of sales and marketing at Kennywood Entertainment, Hood is in charge of allocating advertising dollars at the company’s Kennywood, Sandcastle and Idlewild amusement parks.

“I have already been working on it for about three to four months,” Hood said of his plans for company advertising in 2008. “The process essentially starts with what we did the preceding year.”

Still, Hood said the company is not completely tied to what it has done in the past.

One traditional formula calls for companies to spend 70 percent of advertising resources on what has worked in the past, 20 percent on variations and 10 percent in completely new areas.

Hood uses a variation of the 70-20-10 model. He spends about 75 percent of the company’s advertising dollars on tried-and-true techniques and the remainder on new methods of advertising.

“We are not going to throw what’s worked for 50 years out,” he said.

Adam Golomb, director of marketing at Homestead-based Eat’n Park Hospitality Group Inc. and president of the Pittsburgh Advertising Federation, said he likes to divide the amount of money spent on unproven techniques into two categories — 20 percent on things you think are going to work and 10 percent on experiments.

In other words, each year, explore new “wild and crazy” techniques, if possible, he said.

Richard Wolk, CEO of Shadyside-based RJW Communications Inc., said that choosing the proper medium for your advertising dollars is no simple matter.

“You try to determine why they are advertising,” said Wolk, whose firm buys media for various clients including Kennywood.

Wolk and others said the best advertising medium depends on a host of variables and there is no one-size-fits-all strategy. The type of media a firm should use depends on where it wants to reach its customers, he said.

“Do I want it to be somewhere they can come and find it, like the Internet, or do I want it to be somewhere I can come to them like television?” he said. “Do I need pictures? Do I need sound? When I want to speak with these people, which medium makes sense?”

Steve Wayhart, who runs Carnegie-based BrandMill and is acting president of the Pittsburgh chapter of the American Marketing Association, said spending on retaining existing clients should not be ignored.

Wayhart said that when it comes to advertising, “It costs you five times as much to acquire a client as to retain. You should spend about one-third of the proposed lifetime value of an existing customer to acquire new customers.”

Petra Arbutina, executive vice president and director of contact strategy with Downtown-based Blattner Brunner Inc., said companies should always keep the habits of their customers in the back of their minds.

“What media do they consume, what are their lifestyle habits,” Arbutina said. “How they consume it, when they consume it … that leads us to an overall strategy.”
Spend wisely

Five tips for spending your advertising dollars:

1. Start planning several months in advance.
2. Consider all options, including new media.
3. Stick with successful techniques, but don’t be afraid to spend about 20 percent to 30 percent of your budget on new methods of advertising.
4. Identify audience demographics and target with correct mode of advertising (i.e., radio, Web, television).
5. Don’t forget to spend a portion of your advertising dollars on retention of existing clients.

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Sources: Keith Hood, Steve Wayhart, Petra Arbutina, Adam Golomb
bsemmes@bizjournals.com | (412) 208-3829