Demand Harvesting VS Demand Generation - Factors To Determine Your Advertising Budget

Happy Friday everyone, 

The other day I saw a TikTok of a short skit that seems to perfectly portray the interactions between an advertising agency and its client. (As an owner of the advertising agency, you cannot imagine how niche my fyp is) The skit shows a western shoot off on main street. “What’s your budget?” the agency would say. Then the client would counter with “Well what’s your rate?”. “Well our service rate adjusts to fit your budget…”. I thought this was hilarious in its accuracy but I think it would be great to address these situations and provide our “rate” and why I am on the team of what’s-your-budget. 

When it comes to advertising, it ultimately breaks down to two major categories that I have mentioned in the previous blogs, demand harvesting and demand generation. The leads gathered from these two categories differ greatly and should be a factor when discussing ad spend. 

Demand Harvesting

As the word suggests, harvesting means you are gathering what is already made available. An example of demand harvesting is using google ads. This advertising method is gaining the attention of searcher who already have the intent to buy. So typically it is used for advertising clients who have smaller budgets and/or more common services. 

Demand Generation

This is ultimately the trickier strategy and often requires more skill to optimize. Demand Generation is the process of creating new interests and generating new demand. An example would be using facebook ads. The user is typically targeted through their cookie history with similar or relevant searches, then the ad is proposed to the user to take action. This advertising method is typically used for clients who have higher budgets to promote new business or very niche products/services that are not commonly known to be searched for. 

Now that the two categories are defined. Put yourself in the shoes of an advertiser. If a small time contractor that can provide a variety of services from common repairs to big custom installations. How would you provide your advertising rates to the client? Of course it would depend on the route the client wishes to take, but ultimately it does come down to the budget for you to know if you want to take on the job or not. 

At Local Spear Leads, we are flipping the agenda. Starting at $1000/ month we will provide a money back guaranteed amount of leads up front. This way our clients have a min budget that they are aware of and a starting point to try out the service. This way action is taken and no more western standoffs are a true thing of the past. 

Contact us now or fill out the form to get your monthly lead guarantee estimate!