In many business schools, it’s still the “accepted wisdom” that you can lose money on an advertising campaign and still come out ahead, if only because you have created a bigger “brand awareness” in the market. But, is there any truth to this idea?
For very large organizations, there probably is. Maintaining a presence in people’s minds can be important when you have an advertising and promotional budget that runs into the millions or billions. But, for the rest of us, losing money is just losing money.
The one exception? At the beginning of an advertising campaign, when you’re testing a new medium, offer or message. Sometimes, it takes a few rounds of edits and revisions before you can find the “sweet spot” of profitability…or even determine whether the promotion is likely to be a profitable one in the future at all.
So, don’t be afraid to experiment a little when trying something new, regardless of what kind of advertising campaign you’re working with. But, if it doesn’t look like you’re going to be making money from it anytime soon, don’t throw good money after bad by investing in a losing idea.