When you advertise online you need to define what you want to achieve. In marketing this is referred to as a conversion. You can think of a conversion in terms of your customer making an order, calling your business, signing up for a newsletter, etc. These are the goals you have in mind when you start advertising either online or offline.

For small businesses, advertising can be perceived as an costly expense, but if you don’t measure your return (ROI) you have no way to judge either way. Some business owners will even ask how much their marketing or advertising budget should be.  Then we have to go back and ask the fundamental question of what are you trying to achieve?.

Put another way,  how much must you spend to achieve your goal, and what does a conversion mean to you in terms of dollars.

Step 1: Decide what you want to achieve?
What do you want to have happen if someone responds to your advertisement. Is it to order your catalog or make a purchase? Starting with this, you can then determine where you might want to advertise or how to word your ad.

Step 2: Are you Spending on Search Advertising?
Studies have shown that small business use search engines to get found online, so you are probably already spending money on search ads. And if you are, then are you over spending? Or should you be advertising somewhere else? Without understanding how much a conversion is costing you in terms of advertising spending you will not know if there is a cheaper alternative.

Step 3: Have you made the conversion easy to do?
After you have generated interest and someone has responded to your ad do you make it easy to make an order, or find your catalog request form? These are key questions to ask yourself. If you have an effective ad but do not have a landing page or any easy to follow process after they click or respond to the ad you will lose customers.

Step 4: If you are heavily spending on one medium have you tried another?
Lets say for instance you only print flyers or advertise in the local paper. If you haven’t tried another audience or another medium such as paid search advertising or sponsorships how will you know if your returns for money spent is expensive or not. You might see better or worse results but then you will know if you are spending too much for each conversion or where you might be able to improve.

Step 5: Branding
Some people may suggest that all advertising is good because it gives you exposure in terms of brand awareness. However for most small businesses advertising is something that needs to generate results through conversions. If you are not getting conversions than it really doesn’t matter how much brand awareness you have. Perhaps you are marketing to the wrong audience, or using the wrong message. And hopefully you have made it easy to convert for those that wish to buy from you.

Image Credit: City on Fire (via Flickr)

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Research from WebVisible shows that small business spending on search advertising has risen. This is primarily due to the effectiveness of this medium.

Average spending by small-business search advertisers was up 91% year over year and 93% quarter over quarter in Q3. The average number of keywords purchased was also up.

Worth noting is that Microsoft’s new search engine Bing also resulted in the highest click through of the top search engines. If you are not yet listed in Bing as a local business take a look at our earlier post on setting up a Bing Local Business Listing
Other research in the small business space also indicates that in addition to email marketing, search engine advertising will be increasing into 2010.

Key findings related to Search Engine ads and visitor actions include:

93.1% – Click through to a website
49.2% -Submit an email
49.0% – Print Landing Page

If you are new to search engine advertising then we would suggest you consider testing it out. Even if you have a small budget you can still run some ads and see what your results look like. In fact most companies take a small budget to try out new keywords to see what words perform the best, before they spend a lot of money on a longer term campaign.

Source: eMarketer

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