Web Lever - Should You Advertise?

Should You Advertise Online?

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There are many different kinds of companies and business models, and the benefits of advertising online will vary from one type of business to the next. For some, it is the only path to success. For others it would be a waste of money. Are there any considerations that can guide a company in deciding whether to invest in online advertising?

The question here is not where to advertise, as there are a multitude of alternative Internet advertising channels you can choose, but whether to advertise. Here are some important factors to consider in your decision process.

1. Have you invested in a website that will accomplish the mission of converting visitors into leads or sales?

If the answer is “no” then you should address that problem before investing in Internet advertising. A website that is effective at converting a visitor into a prospect/customer is a prerequisite to advertising online, otherwise you will be wasting your ad budget by sending good traffic to a bad website.

2. Do you need to win a significant number of new customers in the course of a year to achieve your growth goals?

Note the word “significant” is relative but for some companies it may be as low as 15-20.

If you can do well by serving only a handful of customers then advertising of any type should be questioned, although advertising for brand enhancement purposes may still be important. On the other hand, if sustaining and growing your business depends on an ongoing stream of new customers then advertising, including Internet advertising, is probably critical.

3. Are you in a competitive market?

If you’re the only game in town and customers truly need your product then you’re not in a competitive market. It doesn’t make sense to spend money on advertising if you know it won’t lead to any additional sales. An example here would be your local utility company - you truly need electricity at your home and you only have one choice for where to buy it. So, you are not likely to find your local electric utility advertising on Google.

But if you have competitors or if customers can get along fine without your product then you probably should be advertising, and depending on your answers to the other items in this list advertising online may be a good approach.

4. Is it difficult to be ranked well in the organic search results of Google?

Search marketing is one of the most effective online marketing methods for companies in Technology B to B industries. Spend some time searching on Google for topics that are relevant to your company's products and services. If your company's website is well ranked in the free listings of search results for the search phrases that matter most to you, then buying ads in the sponsored listings may not be profitable.

Or if you're not well ranked, are the top 20 listings in the free results associated with relevant and useful websites that will be difficult to displace? Websites like About.com and Wikipedia.org are considered highly authoritative by the search engines and using Search Engine Optimization (SEO) techniques to get your website placed onto page 1 along with the likes of these can be difficult, and if it can be accomplished will take several months. In this case you should consider search advertising, since getting an ad onto page 1 of the search results page can often be accomplished in a few minutes.

5. Are you or your competitors investing in offline mass media advertising, such as Industry Trade Journals & Magazines (for B2B), or the Yellow Pages, newspapers radio or TV (for B2C)?

The Internet has become a dominant channel for mass media, and if offline mass media advertising works then Internet advertising stands a very good chance to work even better.

6. Do you have respected competitors that are advertising online?

Your competitor(s) may have already done the work and determined that advertising online is indeed profitable. The best indicator of this is when a competitor’s ad consistently shows up online for an extended period of time. Yes, it could be that your competitor is simply wasting his/her money and should not be advertising. In most cases the assumption that your competitor is incompetent is wrong.

Netting it out

If you answered “No” to any of questions 1 – 4 then further analysis is warranted before any significant investment in advertising online. Some low budget experiments can be conducted to determine the potential of positive ROI.

If you answered Yes to all of question 1-4 but “No” to 5 and 6 then Internet advertising should be tested,  starting with a small investment and building as you learn.

If you answered “No” only to question 6 then you may have a great opportunity to beat your competitors to a goldmine of new sales leads by advertising online.

Lastly, if you answered “Yes” to all of the questions, you are likely in catch-up mode and will need to hustle to make up for lost time with the online advertising opportunity.

Contact Web Lever today and we can help you think through these questions and others that bear on your online marketing strategy.