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Why Your Advertising is Wasting Money and What to Do About it

Online advertising should be your best bet in terms of confidence. There is little you don’t know about performance of internet advertising campaigns. No hoops to jump through here, everything you need to know should be automated and available.

So why is it people waste their advertising budget on no-hoper campaigns that generate lots of traffic but very little impact on the bottom line?

Did you see the report that eBays traffic increased when they stopped their USA Adwords advertising?

Unfortunately many of us have been hypnotised into believing all we need is a big enough pool of prospects, attract enough visitors. Listen carefully when a friend is talking about their business model …

So if I just get 5% of the market we will be millionaires …

Even worse they might not even think as far as making any sales at all.My advice?

  1. Test & Track – Experiment but with an eagle-eye on your stats. Track every campaign down to conversions. If you do not get your desired conversions from that keyword, ad, campaign, type of advertising then pull it.
  2. Brand AND Convert – Yes repeat exposures will assist in building brand but so will repeat exposures to ads that actually convert. Also the best branding is through experience and word of mouth. That is, having a great product or service and delighting your customers. If you have a massive budget then go right ahead and create branding campaigns, otherwise spend your budget dollars more carefully.
  3. Sales NOT Traffic – Unless you can afford to keep up your level of spending forever you need to keep a close eye on the bottom line and drive your business with tactics that make a positive impact. You can’t afford to be monitoring Alexa and Hitwise, your sales will tell you if you are on the right track.
  4. LTV – You want steady growth, great customer service, positive, building word of mouth. You want life time value. Do not sacrifice long term company health going after short term profit. Monitor average customer value and defections closely.
  5. Stay Golden – Work out where your best customers are coming from and do more to attact them. Every business will have a spectrum of “barely profitable” through to “if we could only clone this customer!”. Create special offers for your top 20% “Gold” customers. Learn as much as you can about your best customers, profile them, nurture them, get them and your campaigns to attract more of the same.

Online advertising is not rocket surgery but at the same time it is not “fire and forget” either. You have to monitor, test, tweak and track everything from beginning to end. Most importantly trim the fat.

There are very few channels as fast and responsive as online but speed can kill (your budget). Be a careful driver!

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Comments

  1. But what about small time bloggers who have no idea what sorts of advertising they should do?

  2. But what about small time bloggers who have no idea what sorts of advertising they should do?

  3. The same advice for anyone, point 1 – test and track. Do try stuff but not randomly, have a goal and measure each tactic against that goal, experimentation backed up with stats. If you don’t know what result you expect don’t do it until you do.

  4. The same advice for anyone, point 1 – test and track. Do try stuff but not randomly, have a goal and measure each tactic against that goal, experimentation backed up with stats. If you don’t know what result you expect don’t do it until you do.

  5. Great advice Chris, the web is so uniquely different from other mediums in that you can monitor everything in real time and then make adjustments on the fly to increase conversions.

    I need to plug Guy Kawasaki’s The Art of Innovation video, this is must see stuff, especially for developers…

  6. Great advice Chris, the web is so uniquely different from other mediums in that you can monitor everything in real time and then make adjustments on the fly to increase conversions.

    I need to plug Guy Kawasaki’s The Art of Innovation video, this is must see stuff, especially for developers…

  7. Advertising is such a tricky game, thanks for bringing this up, Chris. I’d be interested to hear more about what kind of campaigns you’ve run, and what kind of results you’ve gotten.

  8. Advertising is such a tricky game, thanks for bringing this up, Chris. I’d be interested to hear more about what kind of campaigns you’ve run, and what kind of results you’ve gotten.

  9. @mark – Guy Kawasaki rocks ๐Ÿ™‚

    @Mark S – For years I worked for advertising and marketing agencies so there are hundreds of them. I will have a think about trying to dig up some of the more interesting ones without any client confidentiality issues.

  10. @mark – Guy Kawasaki rocks ๐Ÿ™‚

    @Mark S – For years I worked for advertising and marketing agencies so there are hundreds of them. I will have a think about trying to dig up some of the more interesting ones without any client confidentiality issues.

  11. Now, that’s an interesting history, Chris. I’m most interested, obviously, in ones that are relevant to my own experience. Although I’m doing well as a micro-business, I won’t be spending tens of thousands, or even multi-thousands, on an ad campaign.

    What kinds of stories could you share for the low-end marketer? And, I don’t need names. Yes, I’m trying to pump you for info. ๐Ÿ™‚

  12. Now, that’s an interesting history, Chris. I’m most interested, obviously, in ones that are relevant to my own experience. Although I’m doing well as a micro-business, I won’t be spending tens of thousands, or even multi-thousands, on an ad campaign.

    What kinds of stories could you share for the low-end marketer? And, I don’t need names. Yes, I’m trying to pump you for info. ๐Ÿ™‚

  13. The smaller campaigns are probably the most interesting as they are the ones where there is minimal budget wiggle room, but the big ones can be interesting too as you have more room to experiment without fear of being fired. 90% of what I learned about advertising and copywriting was via clients and their campaigns and the other 10% those campaigns validated ๐Ÿ™‚

  14. The smaller campaigns are probably the most interesting as they are the ones where there is minimal budget wiggle room, but the big ones can be interesting too as you have more room to experiment without fear of being fired. 90% of what I learned about advertising and copywriting was via clients and their campaigns and the other 10% those campaigns validated ๐Ÿ™‚

  15. Hi Chris
    Thank you for the suggestions.
    But I feel, for the start, you try to bring in as more prospects as possible. Good or bad, it gives you confidence that if chosen right campaign, you can make some good conversions.

    Rajesh Shakya

  16. Hi Chris
    Thank you for the suggestions.
    But I feel, for the start, you try to bring in as more prospects as possible. Good or bad, it gives you confidence that if chosen right campaign, you can make some good conversions.

    Rajesh Shakya

  17. great post! we have a few sites but only pay for advertising on one. We have been experimenting with original educational content, internal linking structures and trusted inbound links. We have removed most of our reciprical linking campaign energies because most of the robots or people requesting them dont seem to care about what we do and who we are. The most valuable is defiantly word of mouth as Chris said and the educational content that converts.
    The tracking is key, tracking quotes, orders and phone orders from specific keywords. the phone orders are the hardest to track, we can only track about 50% of them. 100% tracking from every source is key to trimming the fat it is time consuming and worth the time. our product site is were we spend the high $$ inefficient adwords and msn moneys on.
    Our blog seems to be doing great as far as page rank is concerned a 5/10 with in 3 months. Although, PR does not seem to mean much unless you are using the blog for creating targeted inbound links to a product site. You explained this to me back in your post on How a blog can boost your web traffic and I have realized and learned that PR does not attract loyal customers most of the time. Analyzing and taking care of your loyal customers attracts loyal customers.
    Dont know if I got a little of track but I just enjoy it when your posts make me think. thanks

  18. great post! we have a few sites but only pay for advertising on one. We have been experimenting with original educational content, internal linking structures and trusted inbound links. We have removed most of our reciprical linking campaign energies because most of the robots or people requesting them dont seem to care about what we do and who we are. The most valuable is defiantly word of mouth as Chris said and the educational content that converts.

    The tracking is key, tracking quotes, orders and phone orders from specific keywords. the phone orders are the hardest to track, we can only track about 50% of them. 100% tracking from every source is key to trimming the fat it is time consuming and worth the time. our product site is were we spend the high $$ inefficient adwords and msn moneys on.

    Our blog seems to be doing great as far as page rank is concerned a 5/10 with in 3 months. Although, PR does not seem to mean much unless you are using the blog for creating targeted inbound links to a product site. You explained this to me back in your post on How a blog can boost your web traffic and I have realized and learned that PR does not attract loyal customers most of the time. Analyzing and taking care of your loyal customers attracts loyal customers.

    Dont know if I got a little of track but I just enjoy it when your posts make me think. thanks

  19. Chris,
    I just got back from a trip to NYC and point #4 seems to be lost on the airline industry. I find it funny that simple, basic, and fundamental business concepts are so easily forgotten.

  20. Chris,
    I just got back from a trip to NYC and point #4 seems to be lost on the airline industry. I find it funny that simple, basic, and fundamental business concepts are so easily forgotten.