Advertising might make you think of Madison Avenue tastemakers having flashes of inspiration as they dream up catchy slogans — you know, like Mad Men. But for most small businesses, it's a much simpler (and arguably not quite as exciting) necessity. Here's why.
Google reports that pay-per-click ads return $2 for every $1 spent. That's a 200% return on investment. But digital advertising isn't the only effective form of paid promotion.
Media outlets like online and/or print publications, radio and podcast spots and even local television are tried and true — and effective — means of gaining eyeballs and mindshare.
Grassroots perennials, like billboards, events, direct-mail flyers, or even a sponsorship at your local Little League field are especially effective in local communities.
Having this range of choices is a plus — especially because the competition for your ad dollars may make it easier for you to negotiate pricing.
Ad spending by the numbers
How much should a small business spend on marketing and advertising? As suggested by the SBA, advertising to consumers calls for a spend of 9.5% to 12% of target while business-to-business advertising may require 6.5% to 7%.
It extends your reach.
Where are the people you want to serve, and how frequently do you want to engage with them beyond the sign on your place of business and your webpage? Adding a recurring display advertisement for your doggie day care center in a high-gloss local real-estate publication may put you on hundreds of coffee tables.
For businesses that aren't geographically based, purchasing key placements in your prospects' virtual and real-world hot spots puts you on their radar.
Consider sponsoring a podcast on a related topic. You'll be capturing prospects' attention when they're most receptive to learning new information (especially when they binge-listen!)
Look into ads on a popular website that drives daily traffic. Selling sporting goods and leisurewear? How about the weather page of the local TV station?
It wins new customers — and keeps the current ones coming.
Getting in front of new audiences requires a sustained investment and some patience. Expect to spend 20% or more of your sales goal for rapid growth, and about 5% to 10% for sustained revenue.
Rapid-growth spending can, for example, buy you access to an adjacent locality in your geo-targeted efforts, or a push into new communities online. They're going to expect a message that's just for them, so be ready to address that expectation.
You could recast your miniature golf course that's already popular for kids' birthday parties as a great choice for company holiday gatherings. Swapping images of kids in birthday hats for adults in "business casual" shifts the meaning of "Have your party with us!" — and may bring a new, lucrative customer segment into the swing of things.
It boosts your other marketing efforts.
Look at what you're already doing in terms of promotions. You'll probably spot ways that putting paid exposure behind those efforts could magnify their effectiveness.
For example, consider amplifying the impact of your hard work developing a social media presence and an SEO strategy by investing in promoted posts to target your specified demographics. Selling a new, color-customizable line of shin guards? Target sports enthusiasts who follow the hashtag "soccer" or "World Cup." It's almost like making a phone call to new, well-filtered prospects!
Likewise, a display ad inviting readers to sign up for an online newsletter can increase your list size and boost your newsletter circulation. Adding a QR code to your placement in a magazine will make it even easier for consumers to deepen their relationship with you.
You get to build your brand.
Giving serious consideration to brand building will almost always pay off, no matter how small or large your business may be. When you develop a consistent look and feel with a logo, specific color combinations, and consistent language and style choices, you're conveying your firm's stability and reliability. An insurance agency would probably draw more clients with such consistency, while a trendsetting business like a florist or hair salon might benefit from seasonal campaigns.
When you spend time and money to create a comprehensive, targeted advertising program, you're telling customers and prospects that you're alive, prosperous, and willing to invest in telling the world about it. And you know what? Like begets like. Projecting this positive image of being a thriving, happy business is bound to bring you even more success.
Did You Know?
Businesses of all sizes must abide by the Federal Trade Commission's Truth in Advertising laws. Get up to speed with the guidelines and stay in the good graces of your customers, competitors, and the law.
Since 2008, Fora Financial has distributed $3 billion to 35,000 businesses. Click here or call (877) 419-3568 for more information on how Fora Financial's working capital solutions can help your business thrive.