The Shift Towards Internet Advertising

“However beautiful the strategy, you should occasionally look at the results.”

Winston Churchill

Traditional vs. Direct Response Advertising

In the small business world, traditional brand advertising doesn’t work.

Been there, done that.

I’ve discovered there are two kinds of advertising:

1.  Traditional Advertising – these types of ads aim to build awareness for your company and aren’t much more than the information on your business card – Company Name, Logo and Contact Information.

Tip: You will never get a call from someone with this type of advertising.

These ads are done by big corporations that spend millions on advertising or small business owners that don’t know any better.

2.  Direct Response Advertising – the goal of this type of advertising is to get a response from your target audience.

Advertising is a real estate game, the larger the ad, the higher the cost. Direct response ads can be the most cost-effective because they eliminate the corporate dribble and deliver a value proposition to your audience.

Here is the 4 part blueprint for an effective Direct Response Ad that could be used online (pay-per-click) or offline (print ad):

1.  Headline –Broken Down? Need a Tow?

2.  Subheadline – 24 Hour Emergency Towing

3.  Make a Compelling Offer – Free Roadside Service for AAA Members

4.  Provide a Response Mechanism – Call Toll Free 1-888-Need-Tow

Measure Everything

The only type of advertising you should be doing as a small business owner is direct response, not only because it is inexpensive but also because the response rate can be quickly measured.

Measuring the “rate of response” means you must understand the cost of each lead and ultimately the cost to acquire a customer.

For example, if my pay-per-click cost is $0.50 and I can convert 10% of the people who click through to paying customer, then I am paying $5 to acquire each customer.

• 100 clicks @ $0.50 per click = $50.00
• 10% buy out of 100 = 10 paying customers
• $50.00 cost to acquire 10 customers = $5.00 per distributor

If the profit I make from each customer is greater than $5.00 then I have a positive return on my advertising investment.

Figuring in the lifetime value of the customer – how much additional business that customer may refer my business or how much more they may buy – then my profit gets much higher.

I hate losing money so I want to get the quickest feedback possible as to whether an ad will work or not. This means testing several different ads to measure which advertisement gets a higher response.

Why Online Advertising?

The internet is by far the best place to test advertising because the results are instantaneous and low cost.

Once I determine the best ad structure online, then I re-use it offline.

Without having a mechanism to measure the performance of an ad, you run the risk of wasting money and killing your profits.

To learn more about setting up effective online and offline marketing campaigns, contact Halo Effects, an Arizona internet marketing firm, for a free consultation.