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The Problem With Advertising - The Web Has Been No Salvation For Small Business

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The United States Census Bureau and the Small Business Administration recognize a line that defines the difference between small and large businesses. Businesses with 500 or more employees are considered \"big\", while those with fewer than 500 are considered small. There are over 18,000 companies nationwide that meet the definition of big businesses.

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The United States Census Bureau and the Small Business Administration recognize a line that defines the difference between small and large businesses. Businesses with 500 or more employees are considered "big", while those with fewer than 500 are considered small. There are over 18,000 companies nationwide that meet the definition of big businesses. When you subtract those from the total, there are approximately 29.6 million small businesses in the country. This comprises more than 99.9% of all businesses in the U.S.

All businesses, big and small, have the same goal of getting consumers to buy their product or service. Beyond that, any similarity ends. Each business faces unique challenges in order to sell a product or service and there has been no one-size-fits-all answer where marketing strategies are concerned. Larger companies tend to be more focused on branding where smaller companies are more focused on their advertising dollars directly resulting in a sale. There is a wide disparity between big and small business where it concerns the percentage of gross sales that are devoted to marketing. A large company like Walmart may spend billions of dollars, but that figure accounts for less than one-half of one percent of gross sales. By contrast, small companies may devote a whopping 10% or even 15% of gross sales towards advertising, and that may only result in hundreds to perhaps a few thousand dollars.

Make no mistake; those hundreds of dollars add up quickly when you consider the millions of businesses involved. These smaller businesses do advertise. They must advertise. It's nearly impossible to know just how much it all might add up to because no one is monitoring how much micro-sized firms are spending in things like direct mail, and there is no news coverage of how much a small town paper raked in from paid advertisements. But it is believed by many that these 29 million businesses account for between $100 billion and $150 billion. A large business like PepsiCo spends over a billion dollars a year for the purpose of brand awareness. They want their logos and their latest slogans emblazoned in your brain. Never will you see an ad from Pepsi saying "50% Off Diet Pepsi". The purpose of their advertising is front-of-mind awareness, not a call to action. The call to action is a function of the supermarket or other retailer.

Not so for Mom and Pop who own a hardware store or Jim Smith, the owner of Smith Plumbing. Their ad dollars are intended to directly result in a phone call or a walk-in, and then a sale. Their advertisements are a call to action, and as much as they'd like to create front-of-mind awareness, branding is a secondary consideration.

In this internet age, the tried and true of advertising has swiftly become the tired and false for small businesses. The usual avenues for advertising are of questionable value. Television and radio ad campaigns can be cost-prohibitive for smaller businesses, and with the advent of Tivo and XM satellite radio, the reach of these old guard media is waning. Same goes for printed media. Those directories with yellow colored pages are expensive and more and more people are using Google to find what they need. Newspapers around the country are hurting with more and more people turning to the web for their local and national news. Fewer readers means lower potential for a small business' ad to create a sale.

That leaves small businesses turning to the internet to advertise their products or services. But the strategies available on the web leave much to be desired, and the statistics on results should give any business owner pause.

The least expensive and most effective method of marketing a small business is by working on the ranking of a business listing through popular search engines like Google and Yahoo. However, this type of thing is beyond the capabilities of many business owners who find themselves intimidated out of trying to market on the internet at all. Indeed, the majority businesses still do not even have a website. That leaves these businesses seeking outside help from internet marketers in order to generate sales from the web.

But what are these business owners likely to be sold? The probable answer is a mix of creation of a web presence, Search Engine Optimization (SEO) and, of course, banner ads. Higher rankings in the organic search results can and does result in a return on the investment, but banner ads are still pushed hard by many internet advertiser experts. These banners seem to be available in two varieties: Annoying or Ignored.

From ads that incessantly blink at you from the sidelines to ones that irritatingly follow you down the page as you scroll, these are the lesser offenders in the banner ad world. The true offenders are ads that begin playing unsolicited audio, ads that expand to cover half of the webpage if your cursor happens to cross within its borders, ads that masquerade as warnings from your computer operating system, ads that show up and obscure part of the video being watched, or of course the old stand-by, the dreaded pop-up. This is by no means an exhaustive list. There are more examples out there, but all seem to be designed to irritate potential consumers leaving me to wonder why any business would want to do that. Is that what the advertising industry is peddling? Are they really telling business owners that the way to bigger sales is to annoy your potential customers?

Well that isn't all they offer. A business owner's other option is to pay for a banner that is sure to be ignored. A person is likely only to see them if they are doing research for an article about internet advertising! But they are everywhere. On a Google results page you can find them on the right margin of the page. In some articles you will find them carefully placed in a box within the body of the text. Even Facebook has advertisers. Have you seen them? Studies have shown that most other people haven't either. Research the term "Banner Blindness" and you find comprehensive studies that include graphics that show what the average internet user looks at when visiting a webpage.

Most banner ad campaigns are paid for either on a "pay per impression" or "pay per click" basis. This means that the business owner will pay for every time the ad appears on a page, or pay for every time the banner is clicked on.

A few surveys have been done that reveal the results of all banner ads. The numbers vary, but it seems the average banner ad is viewed somewhere between 1000 and 10,000 for each click. But here's the kicker about the clickers. Have you ever seen one of those offers to work from home and make money on the internet? Many of them will pay you money to go around the internet and click on banner ads. How many people might there be out there and how many of the registered (and fraudulent) ad clicks might they be responsible for? I'm inclined to believe that these companies skew the actual results of banner ads and that the number of views for each click is probably a lot closer to 10,000 than 1000. To complicate matters further, just because someone clicks doesn't mean they buy. If the results of views to sales is similar to many companies' results with direct mail, then a 1% rate of clicks to sales would be acceptable. If so, that would mean 1 MILLION views before your ad results in a single sale!

The simple fact is, banner ads are much more suited to large businesses and their goal of front-of-mind awareness. It is not a good option for small business owners and, for now, they should stick to campaigns that focus on upping their ranking in the organic search results of popular search engines until something new, truly different and innovative comes along.

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