Online advertising is an important tool for business today – having a presence on the web can do a few very important things for a business. First, it gives the customer a direct link to provide feedback, troubleshoot, and share with friends. Second, it can greatly enhance sales and revenues. Finally, advertisements can be segmented to areas of the web which will capture a target audience. With all of those great attributes, why wouldn’t a company advertise online?
A Wall Street Journal article today outlined how small businesses are having a hard time getting returns on their online advertising investments, especially on search engines. For those unfamiliar, search engine advertising is done through an auction style marketplace, where clients place bids on certain keywords to appear on users’ screens. The easiest way for small businesses to access these auctions and be successful in winning the auction is to hire a marketing firm such as ReachLocal, Inc., who will “provide hands-on, personalized support.” (Safdar & Loten, WSJ) Small business owners, on the other hand, say that they are filed away and can’t get the same attention or customer support as the bigger players. Of course, this sounds remarkably similar to what happens in investing – where it is in the manager’s best interest to monitor the accounts which have more earnings potential.
So what are the options for a small business owner looking to find online advertising space? The answer, in my opinion, comes through word-of-mouth. While search engine advertising, if done properly and in the right industry, can be effective, it doesn’t compare to a five-star review. For some, the social media space, such as Facebook pages, have been effective for advertising promotions and gaining loyal followers. For most industries, however, users aren’t interested in following a company that will encroach their news food. Instead, small businesses can lean on customer feedback oriented websites and applications such as Yelp to attract new customers. Yelp is just one example of a way for companies to get the word out without spending a fortune – restaurant customers seem to be happy to leave a good review at a place they thoroughly enjoyed. Another interesting strategy was taken by a car dealership in my hometown. For car buyers, accumulating 100 likes on a photo of you and your new vehicle will pay off in the form of the dealership covering your first payment. This innovative strategy has worked extremely well so far, as friends feel obligated to help out with just a click of the “like” button.
Due to the high volume of demand for adspace and the overall low rate of hits, online advertising is a hit or miss affair. For some, advertising an application or one-click purchase on Twitter’s app for mobile devices may be the next solution. Maybe there is an innovative social media solution that companies can use to spread promotion and gain followers. But for most, it may be time to go back to basics – providing a high quality product or service and in return having widely-used and respected platforms such as Yelp available for that word-of-mouth to get around.