Advertising Basics for Business 6

Reprinted with permission from Janet Attard* Copyright 2004. All rights reserved.
     
Should I buy banner ads on websites?

If your customers are likely to look for what you sell in ads on the web, advertising on the web may be beneficial if you can find a cost-effective way to deliver ads to a targeted audience. Banner ads on the web are a little like billboards on highways. You'll need a lot of people passing by to get any to act immediately on the message they see. The average click-though rate for banners on the web is less than ½ of 1 percent (1 in 200 people). Once someone does click on your banner and reach your web site, you still have to convert them to a customer. Thus if your goal is primarily brand recognition, and if you have the money to advertise widely enough and frequently enough to make your name remembered, banner ads can pay off.

If your budget is limited, as most small and homebased business budgets are, buying banner ads on popular general interest web sites isn't likely to pay off. But if you can find popular small web sites that are targeted directly at your audience, banner ads, classified ads, or ads in the site newsletter may pay off. Like all other forms of advertising, you'll have to test each ad and compare the cost of acquiring customers this way to the overall profitability of the customer. But, if you find the right sites, it can pay off.

TIP: Some small web sites are amenable to bartering ads in lieu of cash payments. Thus, if you have a web site or newsletter of your own, you may want to suggest a barter arrangement to sites that sell noncompeting products to the same market you do. If your usage is about equal, a one-for-one swap of ads would be appropriate. If one site has more usage than the other, then work out an appropriate deal.


What about pay-per-click advertising? Is that worthwhile?

Many businesses are finding the pay per click advertising in search engines pays off. The way this works is that when an individual goes to one of the search engine sites and searches on a keyword, ads will be displayed in addition to the natural (called organic) search results. These ads are usually displayed at the top of the page and to the right side of it. The paid ads are displayed more or less in order of the most expensive (highest per click price bid for the ad) to the least expensive.

For instance, suppose three companies choose the word fax as a keyword they want to be found under. Company A agrees to pay 10 cents per click-through; Company B agrees to pay 25 cents a click-through; and Company C agrees to pay 15 cents per click-through. Search results for the term fax would then show up with Company B's listing first, Company C second, and Company A third. The closer one comes to the top of the list, particularly for keywords where dozens or more companies might be listed under a keyword, the more likely it is that their listing will actually get seen by people interested in their product or service

(Google uses a slightly different formula. They also figure in a total campaign price in deciding on position.)

Whether it will for you or not depends on what the per-click costs are, what a customer is worth to you, and to some extent where you buy the pay per click ads. Some of the less popular pay per click advertising networks seem to have less control over fraudulent clicks and seem to send disproportionately large number of visitors that don't stay on the site after clicking on a link.

The two major players in pay per click search engine advertising (Google and Overture) do seem to have controls in place to minimize the chances the advertiser pays for fraudulent clicks. But the per-click charges are considerable higher on Google and Overture than they are on the lesser known search engines.

Similarly, if you work out a deal with individual targeted web sites to pay for click-throughs, and you watch your web site logs to see where the click-throughs are coming from, you should be able to benefit from pay-per-click advertising. Although not all web sites accept pay-per-click ads, if you search around and network with other small companies you should be able to locate opportunities for this type of advertising. As your company grows and can afford to spend more on advertising, you might want to have an advertising agency place the click-through ads for you.

How else can I advertise on the web

One other commonly used advertising strategy on the web is pay per acquisition, which is often called affiliate sales. In affiliate sales, other web sites sign up to sell your product. They put a special link on their site leading to your site. When there is a sale made as a result of someone using that link to get from their site to yours, the site would get a commission on the sale. This is the "safest" type of advertising for the advertiser, but it's often difficult to find good affiliate resellers.

Should I get a listing or ad in the Yellow Pages?

Some businesses get many customers from their Yellow Pages ads or listings, and others get no calls. To decide whether or not you should use the Yellow Pages, you need to consider carefully where your customers look for your type of product or service. You should also consider whether there is a clear-cut heading under which to put your ads. If there isn't, you might not get many customers from your listing.
If your service or product can be easily depicted in a small picture or if you can add some kind of textual information that will build confidence (for instance, "board certified"), then a display ad might be worthwhile. If you are just starting out, however, you may want to make the ad small. If it is successful, consider getting a slightly larger ad the next year, as long as you can be sure the ad will stay on the same page with other listings for your type of business.

Keep in mind that more and more people are turning first to the Internet to search for even local products and services. You may want to look into advertising in online yellow pages, or setting up your own web site if you don't have one now.

Will color help in the Yellow Pages ad?

Opinions differ on how effective color is in a Yellow Pages ad. Some people say it increases response and some say it doesn't. One of the problems with using color in your ad is that the salespeople may have talked everyone else into buying an ad with a color border, too—so yours won't stand out.

Do I need to offer a money-back guarantee?

It is a good idea to offer a money-back guarantee for at least two reasons: it builds customer confidence and it can help lower your chargeback rate if you accept credit cards. Often customers won't buy from a store or a mail merchant unless they can return merchandise for a full refund if they aren't satisfied. Although there will always be some who take advantage of money-back guarantees and attempt to return a product after using it, the majority of customers are honest, and the goodwill you create by offering the guarantee will usually outweigh any losses due to people returning goods they've broken, copied, and so on.

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