July 21, 2011

4 Immutable Truths About Advertising Your Business

Filed under: Ecommerce — Tags: , — Meredith @ 4:17 am

Seeing a slowdown in sales for your creative business? Have you been considering an ad buy to drum up sales? While advertising can certainly be a valuable component in your marketing mix, there are certain rules to advertising that you must keep in mind before you start your ad buys.

1. Targeting matters
Where you advertise really matters. If you don’t know exactly who your target demographic is, you aren’t ready to start advertising. How can you decide where to advertise if you don’t know who you’re trying to reach? Imagine you sell tiaras and tutus for toddlers, if someone gave you FREE ad space in widely read publications like Maxim Magazine and Sports Illustrated, your response rate would probably be pretty weak, if any at all. Those products need to be marketed to moms with little girls, not men who care about football, drinking and scoring with the ladies.

I’ve certainly seen less extreme examples of this mistake, for example people who sell finished handmade goods advertising on sites mainly trafficked by other crafters. Those types of sites are good for selling supplies, but when it comes to selling finished products, there are better options.

2. All the advertising in the world won’t fix more serious problems with your business
You cannot advertise your way out of other problems in your business. If your product photos suck, your advertising is a waste of money. If your website isn’t optimized for easy use and conversions, your advertising is a waste of money. Make sure every other component of your business is rock solid before you invest in advertising. Have good products, have good branding, have good photos, have a good website, have an idea of who your target customers are. If you just pour money into your problems via advertising without fixing these more serious problems, you’re throwing your money away.

3. Advertising isn’t a quick fix
A lot of inexperienced small business owners think “I will run an ad on my favorite blog, their readers will click my ad, love my products, buy tons of stuff and I’ll be rich” Yeah, right.

People often don’t respond to an ad the first time they see it. They may not even click the ad, let alone buy from the business advertising. The idea with advertising is to get your brand and products in front of your target market. If you can create brand awareness through repeated exposure to your marketing, all those little nudges might eventually result in a sale. Expecting a single ad placement to bring a flood of sales isn’t realistic. A well-targeted and well-designed ad will probably bring some immediate sales, but to see a real boost in sales you need a multi-faceted marketing plan that reaches your target demographic repeatedly and consistently.

People that didn’t buy the first time they saw your ad might buy the second time they see it. They might bookmark your site and buy months later. They might connect with you on Facebook and not place an order until you announce a promotional offer months after they saw your ad initially. I see this behavior from my own customers all the time.  Only 30% of the sales on my ecommerce website are from first time visitors! This means most of my customers are people who’ve been hanging around a while before they buy. Their decision to buy may not have been based on a single ad, but rather a series of marketing activities.

4. Math doesn’t lie
Don’t buy ad space until you do your math. Advertising decisions should be objective, not gut-based decisions. Know what your average conversion rate is like. Know what your typical click-through rate is on your ad placements. Know how many impressions your ad is going to get. Use all of this information to calculate what your probable return on investment will be.

If you don’t know how to use this information to make those calculations, my free ROI calculator can help. If you don’t know what your site’s average conversion rate is or what your average click-through rate is with other ads, Google Analytics can get you this information. (I’ve written a detailed ebook on how to use Google Analytics to glean a ton of valuable information about your business.)

While advertising won’t necessarily get you a ton of sales right away, it’s important to have an idea of what results you can expect. For example, you might be considering an ad that only costs $20.00 because it seems so cheap, but if the ad only delivers 10,000 impressions and you get a 1% click-through and 1% conversion, you would be paying $20.00 per sale. If that’s really far off from your targeted cost per sale, this might not be the ad buy for you.

When I try to project ROI for an ad placement, I aim for an ideal cost per sale, and if the projections are close enough to my ideal, I might take a chance. If the projections are nowhere near what I need them to be, I am probably not buying that ad space.

Related Posts Plugin for WordPress, Blogger...

This content is copyrighted. See my content sharing policy here.

No Comments »

No comments yet.

RSS feed for comments on this post. TrackBack URL

Leave a comment