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Sep 13
2018

Small Businesses can Advertise with the Big Guys

Posted by: Steve Marr

Tagged in: Untagged 

The Interactive Advertising Bureau issued a very insightful report demonstrating the major shift into targeted Internet and social media advertising. Internet advertising significantly outpaces television advertising, and the trend is for significant increased growth. The full report is here: https://www.iab.com/wp-content/uploads/2018/05/IAB-2017-Full-Year-Internet-Advertising-Revenue-Report.REV2_.pdf

In the past advertisers paid to reach individuals who were not the target audience. The newspaper may reach thousands of readers in an effort to find a few who may be interested in purchasing a swing set this weekend. 

 

When I lived in Detroit, steel companies purchased advertising on the number one radio station because they believed that three or four key steel buyers for automotive companies listened to a specific DJ. This was a very expensive method to reach a handful of customers.

Technological advances in the advertising industry have been instrumental in advertising accessibility. Developments in bandwidth, access, and speed over the past 20 years have been the backbone of this growth. These improvements have not only helped to improve user experience but have also made new formats and devices possible that have greatly contributed to the industry’s growth. The emergence of mobile, video and audio all began with advances in access, bandwidth, and speed. Continued advances in technology will greatly impact improvement in the foreseeable future.  Every year the digital universe doubles in size.  I've read estimates indicating that growth will increase by 50 per cent by the year 2020. This allows better advertising for the businessperson. You are able to target customers more effectively than ever before.

When you advertise on digital platforms, you learn quickly what advertising is successful and what is not. Take television advertising for example.  Unless the ad is for a direct purchase response, there is not an effective way to know quickly whether the ad was successful or not. You may learn by the end of the next quarter, but by then you have paid a high price for limited results.

In businesses where I have involvement, we are able to target advertising very specifically.  That enables us to see day by day, or even hourly, which advertising brings a response, what the conversion rate is, and track sales in real time. With newspaper advertising, you may learn by the end of the weekend whether readers have acted on your advertising.  That's a lot of time and expense before you understand the result.

In the past advertisers needed to commit substantial money and effort in advance to design ads for newspapers and magazines.  Only advertisers with financial resources were able to make the financial commitment for television ads. For example large automotive chains were able to buy advertising where a local repair shop would not be able to compete. Today the local shop can effectively target those who need repair work or new tires with an effective use of good Internet and social media advertising. Twenty years ago this would not have been possible.

The business leader must embrace these changes, and understand how the ground has shifted significantly to enable marketing in a targeted way. We can hire marketing companies to help, but at the end of the day we need to take the time and effort to understand this new marketing paradigm. For me, I receive regular reports on the success of key word advertising and other online marketing information.  I can easily adjust and put more money into what is working while reducing cost where results were poor.

Scripture shares an example of what it means to understand the implications of change. “From the tribe of Issachar, there were 200 leaders of the tribe with their relatives. All these men understood the signs of the times and knew the best course for Israel to take.”  (1 Chronicles 12:32, NLT) In our businesses we must understand how times change and adjust our marketing and advertising accordingly. 

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