Small businesses face many challenges when choosing how to invest in advertising that will attract new customers. The biggest issue, of course, is to spend money on advertising that will bring direct measurable results. While many ad salespeople will use phrase like “building a brand” or “having tip of the tongue recognition,” most business owners want one thing: sales and a direct return on investment.
In most markets, small business owners have at least the following options: Internet, newspapers, yellow pages, radio, television and mailings. Each medium has distinct advantages and disadvantages.
A web site for almost any business of size is essential. This should be the central place for potential customers or clients to learn about the basics of your business; that is, your products, services, location, hours and contact information. This is your 24/7 receptionist and salesperson. For most businesses, this will be a major funnel through which many of your customers make learn about you and make contact. Your web site address should be on all of your other advertising, as it is the only way for you to provide comprehensive information about your products or services to anyone at any time in any place.
The only other medium that has 24/7 coverage is the yellow pages. There are several problems, however, with yellow pages advertising. First, most markets are covered by several directories, which, in effect, lessons the chances that potential customers will find your ad if you do not advertise in all the directories. Second, the yellow pages are a slowly dying medium. In 2008, Internet searches for local information (i.e, a local restaurant or plumber) exceeded that of yellow pages directories. Most Internet users would confirm this; they seldom use the phone book these days. A small business owner, though, has to balance the costs and reduced coverage with the possibility of not reaching a segment of the population. Older, less tech savvy people are likely to be using the yellow pages in greater frequency than younger, more connected people.
Radio salespeople love to use the word “tip of the tongue recognition.” By this they mean that radio advertising will help to place your businesses’ name at the “tip of their tongue” when people need a product or service. So, say the ad salespeople, radio advertising will help build long-term recognition for a business, even if the ads do not create immediate sales. This may be true to some extent, but most small business owners are likely to be looking for more immediate and tangible results. Radio does make sense for an event, like a limited-time promotion or a one-off event, as it can reach thousands of listeners in a timely manner, but the value of radio advertising for a good or service that most people do not need immediately, is dubious. Other considerations for radio advertising is coverage and listenership. Be sure to ask the ad salespeople for detailed information about demographic and geographic coverage.
Television, much like radio advertising, exposes viewers to a fleeting message about the business. TV ad salespeople, like radio ad salespeople, say that their medium creates tip of the tongue recognition. This is probably true is you advertise a lot on TV, but for a small ad buy, television is likely to have few lasting effects. Like radio, it is a great way to reach a lot of people quickly, which is important when advertising for an event or one-off promotion.
Direct mail can be a very affordable way to reach very narrow segments of the population. If you have a business that sells to other businesses, you can reach every business in your market quickly and with relatively low costs with a direct mail campaign. The immediate response rate might be one or two percent, and the long term response rate two or three times that. The advantage of direct mail is that it puts your message in the offices or homes of potential customers in a target manner. For example, you can rent a direct mail list that targets new movers living in a specific area code with a certain income level. The yellow pages, radio and television lack this level of targeting; that is, you will be paying to reach everyone, even though your product or service might only be valuable to a few.
There is likely to be no one source of advertising that is going to grow your businesses rapidly. For certain, you need a foundation for all of your advertising initiatives and that should be a good, informative web site. After you have your base, branch out and sample some of the other media. Most are likely to have first-time advertiser rates, and depending on your local economy, some will sell residual ad inventory at a significant discount.
The key to judging the effectiveness of any of advertising is tracking. Be sure to ask everyone who makes an inquiry into your business where they heard about your business. Use this information to refine and adjust your future ad spending.