If you don't understand this one simple thing about advertising your business, you're going to lose a lot of money very quickly. Today we're talking about how to advertise your small business. What I want to do for you here today is really break down kind of the basics and the fundamentals of what you need to be thinking about when you're thinking about advertising your small business.
One of the key things about advertising is that it involves you spending some serious money on it, trying to get some kind of return from it. So we want to make sure that you're doing things correctly and basically setting yourself up for success and maximizing your return on investment.
All right. So the very first question that I've got back for you is what are you trying to sell? You see when it comes to advertising, there's a lot of business owners that have the understanding or the idea, and a large part of that is, is partly on my fault and my blame as well, by telling everyone that you should be advertising more, but a lot of business owners then hear this advice that they need to be advertising and they just kind of go off to the races and start advertising.
The problem here is that advertising for the sake of advertising alone, it's a pretty terrible strategy. Also advertising for brand awareness or for simply kind of getting your name out there and trying to reach more people, not a great strategy, because what often ends up happening is you putting time and money and energy into an advertising campaign that may or may not be working and you don't really have a way to track it, or you don't really know if it was effective.
If you don't know it's effective, well, then we should probably stop doing it. This is why when it comes to advertising, probably one of the most important things you need to think about is what am I trying to sell here? What is my core and my key and my end objective and ideally when it comes to advertising campaigns, you want to make this a very specific product or service or offer essentially, just one thing that you're trying to sell per advertising campaigns.
You don't want to cram it all in into one different thing and try to get brand awareness and try to sell everything that your business has to offer. Because what's going to end up happening is you're going to be delivering way too many calls to action, which is going to leave your listeners or your viewers or your readers really confused.
When they're confused nothing is going to do happen. This is why it's crucial that you make sure your advertising is focused on one key thing. One key product, one key service with one key call to action at the end, basically spelling out exactly what they need to do next.
Because when you do this, you're going to be able to track whether the ad was effective or not. And if it's effective, you can do more of it. And it's ineffective. Well, obviously we're going to stop it and try to tweak and try to optimize it.
The next question that I get in regards to advertising your business is how much should I spend? What's what's my budget around advertising? How do I set it? And really this is gonna come down expectations and the cost of your product or of your service or of your offer, whatever you're trying to advertise.
For example, if you're selling something for $10,000 and you only have a hundred dollars advertising budget, well, it's unlikely that that's going to go very far, because that would be a massive, massive return on investment. And if there was an advertising channel that worked to deliver that where you can put it in a hundred bucks and get out 10,000 each time, well, then it would quickly become saturated.
This is why it's important to take a look at your business and say, you do have that $10,000 product for sale. Well, you've got a couple of different options. One of which is you set a more realistic advertising budget like 1000 or 2000 or $3,000. The other is, is maybe you take a step back from your business and find something you can advertise. That's only worth a thousand bucks or 500 bucks, or even a hundred bucks just to kind of get people into the door and introduced to your business.
Another thing is we do want to keep expectations in check here, meaning that a two time return on investment, a five time return on investment, even a 10 time return on investment is often totally possible with the right ad campaign, but hundred time return on investments…These are pretty rare.
If you're going to be getting consistent 100 time return on investments, well, it's not going to happen for long before the rest of your competitors and the rest of the market really figures this out and starts to saturate your, uh, your advertising channel.
Now in regards to setting an advertising budget, if you do find a campaign that is profitable, meaning you're putting in money and you're getting more out in return. Well, my suggestion here is really, we don't want to have an advertising budget after all. If I give you a machine where you could put in a dollar and get out two or three or four or five or 10, how many times did you do that?
Odds are pretty good. You do it as much as you possibly could, which is why it's kind of silly to set an advertising budget when you're getting a positive return on investment. Now, the flip side is if you've yet to really dial in that machine where you're putting in a dollar and maybe you're getting 90 cents out or a dollar out or 80 cents out, and you're kind of tweaking and optimizing it well then yeah, we do want to set a reasonable budget because otherwise we just spend our business right out of business.
So you do need that testing budget in place, but as soon as you're profitable, as much as you can do it, basically until you've got fulfillment issues is pretty much a good strategy. All right? The next thing that you really need to consider when you're looking at advertising your budget is who are you trying to sell to?
This is all about having that ideal customer avatar in mind, that one kind of representation or fictional character that you view that that has the components of that ideal and perfect customer, the kind of customer that you love selling to that loves what you do is happy to pay you for the value you provide will really, what you want to do here is dialing their characteristics around their demographic details, like age, gender, income, occupation, titles, things like that, geographic details like what city state, province, or country they live in and their psychographic details like their attitudes, their interests, their beliefs, affiliations groups, organizations, basically all the mental stuff that goes into it.
The reason you want to be crystal clear about who you're trying to reach is because it's gonna make all of your advertising that much more effective, not only in the language and the design and the words that you use in your ad itself, but also in selecting the right channel, the right platform for your ads, which is my next point here, you see, by far, one of the most important aspects in a successful advertising campaign is choosing the right channel to be advertising on in the first place.
If you get this wrong, you end up in what I call the marketing wasteland, which is essentially where you've got a mismatch between what you're trying to sell and where your ideal customers are active and present dogs after all. It doesn't make any sense to go to a channel where none of your customers are active.
On the other hand, if you do have a really clear and detailed understanding and sort of representation of that ideal customer avatar, well, you can really dial in and pinpoint exactly which channels are going to deliver the highest likelihood of success for your ad campaign. For example, we know that around 68, 70% of all adults who use social media are active on Facebook. This means that Facebook is pretty much kind of a no brainer when it comes to running ads. After all, you're probably going to be able to dial in and target that exact person that you're trying to reach.
On the other hand, let's say your market is under 35 years of age. In this case, we're going to want to take a look at Instagram. Now we can still reach people over age 35 on Instagram. So we might want to consider it, but just keep in mind that there is a bit of a split and this is all about really dialing him. Who am I trying to reach? And what channels are they present on? Then you've got channels like Twitter and LinkedIn, which can be okay for organic marketing, but they're really not very good for paid advertising platforms yet just because they've kind of still got some bugs and they're typically not delivering the best results. So regardless, I'd probably leave those alone. The other hand, we've got a platform like YouTube, which is fantastic for running ads.
You can still reach people over 50, but for the most people on part, that's kind of going to be the cutoff that we're going to want to go after this channel for of course, when we're talking about YouTube, we're talking about video, which means we're adding another element of complexity in the fact that you are going to need a video ad.
So these are all points that you need to consider when you're choosing the right platform and the right channel for your ad. Of course, I haven't even mentioned all the offline channels like newspaper and radio TV, maybe billboards, other local events and all things like that, which statistically can still work, but they tend to not work as well as really highly targeted online channels. And again, if you're going to be advertising with the newspaper or with the radio, make sure to have a really candid conversation with them about who their readership is or their who their listeners are and what time of day is going to be best to hit your ideal target demographic.
That way you're going to make sure you're getting your message in front of the right people and not just wasting it all in the marketing wasteland. So let's say you've got all of that dialed in.
Well, the next piece of the puzzle is what exactly are going to say. What's going to go into your ad. And this part is just as important as who you're trying to reach because after all, if you put out an ad that's irrelevant or annoying, or just really doesn't do anything for your ideal target market, they're not going to take any action.
You're going to waste a whole lot of money very quickly. This is why, especially if you're just getting started with advertising, whether we're talking about online or offline, your main goal should be to be as clear and compelling as possible. That's it basically what I want you to do here is really prioritize clarity over creativity.
There's going to be all sorts of time to get fancy and creative later. But for now, if your listeners, if your viewers, if the people that are consuming your ad, don't have a very crystal clear understanding about what you do, why they should care and how they can take that next step
Make sure to make it explicitly clear about what it is that you're trying to sell and the benefits that it's going to provide. Also, you do need to make sure that it isn't irresistible offer. Essentially. There's no point in putting out a generic or kind of brand awareness ad, just to get more people to know about you because there's far cheaper and basically more effective ways to do it than running brand awareness campaigns with no real strategy behind them. So if you're running that targeted ad, that's selling a specific product or service or offer, you want to make sure that it's irresistible enough for them to want to take action.
From there, you want to make sure that you give a very clear and concise and singular call to action, basically telling them exactly what they need to do next, and exactly how to do that now is not the time to list off all of your different social media accounts and your phone number and your email address and your website and all that.
Give them one clear call to action, direct them somewhere. And then, and the likelihood of them actually doing that goes up exponentially. Not to mention when you're directing them all in one clear direction, it's going to make it a lot easier for you to track. And again, when we track it, we can figure out if you're out of a successful so we can do more of it, or if it wasn't successful. So we can either cut it or optimize it later.
This next piece of advice is something that's really going to help you take your campaigns and make them that much more effective and really get you on the way to becoming an advertising master. And that is you need to know your numbers. Sure. Advertising is a creative game and it's full of lots of art and design and copywriting and making things pretty and making them compelling. But at the end of the day, it's the math and the science behind that ad.
That's really going to prove whether it was a winner or loser. So a few key metrics that you need to understand, and it's going to help you shop around and basically make the right choice for your business.
Well, the first one is CPM and this is basically cost per thousand impressions. And essentially kind of gives you the ballpark figure for how much it's going to cost you to reach about a thousand people or, or basically a thousand impressions, which I'm going to break down what that means just a second.
The next metric you want, and to be aware of is CPC or cost per click. Now, obviously this just has to do with the online space, but you can sort of take a look at kind of how it might play out offline, whether it would be cost per visit or cost per call or whatever other kind of cost per action is going to be dictated by what you're advertising in the ad. From there, you've got CPL or CPA, and this is where the rubber really starts to hit the road and where things get exciting. CPL is cost per lead, which if you're running some kind of lead generating ad where you're giving something in value and basically asking for a name and email, a return or CPA, which is cost per acquisition. And again, this could be the acquisition of a lead or a customer or whatever else you're basically going for in your ad.
These are important numbers to know, because if one of your advertising channels has say a $5 CPL or cost per lead, and the other one has a $50 CPL or cost per lead, you may want to steer some of your resources toward the $5 one. And the next three are reach, which is how many people have seen or heard your ad then frequency, how many times they've seen or heard your ad and then impressions, which is basically just reach times frequency.
Lastly, however, is the Holy grail and the most important metric of all, which is ROI return on investment or ROAS, which is return on ad spend. This is really the number that you need to pay attention to, but you're not going to be able to determine this unless you've tracked all of the previous metrics and really figured out just how much you're spending and how much you're getting back, which is really why your advertising has to be accountable…and you've got to track it through the entire process.
I hope you enjoyed this read by Adam Erhart. This is transcribed from his video which I am giving below. Enjoy?