Should you switch your advertising to digital?

Big trends at play in Canada

"People are taking their smartphones when they go to sit on the toilet!"

This comment was with a lot of laughter, over a couple of glasses of wine.  I was having a drink with a visiting friend who sells advertising for one of Canada’s big daily newspapers.  She wanted to make a point about the incredible growth in mobile and online use — and she did it in a rather earthy way — while also lamenting the downward trend in newspaper-reading.

"I don’t even want to tell you what our circulation numbers are these days," she said, shaking her head sadly.  Those numbers are surely embarrassing to her, which is why I’m not naming her or her employer.

It is indeed incredible what’s happening these days in terms of the human species and our love affair with our phones.  And our computers in their various forms.  As a new report from Comscore Inc. (a major tracker of Canada’s digital trends) showed last week, Canadians lead the world in terms of hours spent on-line.  Its research says we’re up to 45 hours per week

And more and more often, that time on the web is accessed via a smartphone.  Daily mobile content usage is growing by more than 50 per cent in some categories, particularly entertainment, news and sports.   Comscore says almost half of the population has a smartphone these days.

So should small business owners be considering shifting their advertising dollars to new media?

"If you know there’s a place to grab 25 million people who want to buy your product or service, and are searching for you, wouldn’t you want to be there?" asks Bryan Segal of Comscore.  Segal points out that more and more people are checking out purchases on-line before they buy.

"I think that’s why the web is such an important piece of the scene," he says.  "At the end of the day, people may not solely buy online, but they’re using the web as a directory to find products and services."

True enough.  That’s definitely a growing part of consumer behaviour these days.  But when I asked a number of small business people about their advertising habits, not everyone has fallen under the spell of the hypnotic, addictive internet.  Tony Theos of Triple Sick Tattoos and Piercings in Gravenhurst, Ontario, isn’t on-board the digital train.  "I don’t even have a website!" he crows.

Theos’ claim to fame is as the "home of the twenty dollar piercing" —a bargain apparently, since piercings can cost anywhere from $40 to $120. He tried online advertising for a year, but gave it up a year ago.

"For the money it was costing me, versus the response I was getting, I felt it made more sense to discontinue the advertising online and go with the bigger picture," he says.   He currently advertises on three radio stations, spending $1500 a week for 50 thirty-second spots on one station (buy 50, get 50 free).    And he rents three billboards.

"You can control what you see online, but you can’t control your viewing of a billboard on the side of the road," says Theos.  "Unless you’re blind, and then you shouldn’t be driving!"

Theos admits he’s a huge fan of advertising — he sponsors the weather on the radio and also sponsors various races at the Barrie Speedway.  He also sings the praises of a small two-foot-by-two-foot billboard he has just across from a Tim Hortons location.  He says his advertising activity has helped him build a booming business.   Close to 80 per cent of his clientele drives an hour to get their bargain tattoos and piercing at Triple Sick.

But his strategy seems to fly in the face of some classic marketing wisdom I heard from Shanaz Bhimji of Calgary’s Venture Communications. She advises the firm’s clients on which media they should buy, in order to get their message across.

"Before we decide what medium to recommend, we ask who is the target audience?  What are their media habits?" says Bhimji.  "If they’re young they’re using radio, they use internet.  Their phone is their be all and end all.  It’s their computer, it’s their social gadget.   If you have a product or service used by older people and you’re looking for the older demographic, the media combination might include the print medium.  Newspaper circulation is down but there are still lots of people reading them."

It’s good old common sense:  fish where the fish are, as the saying goes.   But Tony Theos’ experience appears to be contrary, in the sense that his pierced and tattooed young clients must be prime targets for ads on the internet.  Turns out I’m guilty of stereotyping.

"I’m advertising to the masses," says Theos.  "Yes I’m catering to young people, but most of our tattoo customers are not teenagers.  Most of them, I’d say the average age is 25 to 60.   Our piercing customers range all the way up to 78 years of age.   I couldn’t tell you the amount of elderly women who’ve wanted their whole lives to get their nose pierced.  I’ve even had customers in wheelchairs."

Well that’s an eye-opener!  But back to the question of advertising….

Theos is clearly putting significant dollars into his campaigns, but other entrepreneurs I spoke to were a bit more price-sensitive, and therefore, keen on digital advertising.

"For our industry, the online advertising is less expensive, which allows us to save consumers money in commissions while still providing them with full services," says Susan Rochefort of Lime Green Realty in Red Deer Alberta. She says she and her partner have cut their promotional costs by 75 per cent, and that digital is also preferable from a strategy standpoint.

"We find there are more qualified buyers online, and print advertising is less timely in our business.  In our experience, print advertising is effective for branding and lead generation for the agent, but is not overly effective in finding a buyer to get a house sold in 2012."

I heard a similar sentiment from Anuj Gotra of Nexco Networks, who provides voice over internet services for local businesses in Montreal. "Internet marketing works great, in my experience, when you have a customer who knows exactly what the product is and exactly what they are looking for," he says.  

"Often times, and especially in our industry, low knowledge buyers tend to gravitate towards larger firms, based on how many times they have seen advertisements in the traditional sense."

Gotra says his company has actually had good success with faxing potential customers.  He admits it’s an outdated technology, but for now, it’s working.  And again, it’s cost-effective.

"For a growing company like ours, it’s not necessarily advantageous to allocate marketing dollars to mass market as opposed to just targeting the segment of interest," says Gotra. 

It’s clear that every business has to think hard about which media is going to be most effective in delivering their advertising message.  The good news for my friend at the newspaper, who lamented the use of smart-phones in the bathroom, is there is still demand for what she’s selling.   

My own conclusion after speaking to these entrepreneurs, is that despite all the hype about the exploding uses of mobile phones, and iPads, not everybody has to rush to get on the digital bandwagon.  

There’s no question online advertising is ideal for some, but definitely not all.