Advertising for Small Businesses
Small businesses need to advertise to encourage growth and expand reach. Many startups and small businesses do not consider paid media services due to the cost and other factors. Brands should always have an investment in paid media because of the business benefits. Zero advertisements could limit short-term and long-term sales and sales growth.
Recommended Advertising Budget
Brands might face internal and external business issues. The issues could impact a company’s ability to generate a paid media budget. However, it’s important to create an advertising budget - despite the size of the budget.
According to the U.S. Small Business Administration, companies with less than $5 million in revenue should invest 7-8% of their revenue into marketing.
Ppcexpo suggests spending up to 20% - 25% of the total budget on marketing for young companies.
Companies should use these percentages as benchmarks. Additionally, brands should know marketing includes product, place, price, and promotion updates. The entire budget should not go to just paid media. Regardless of the budget, there are a ton of advertising benefits.
Businesses Need Exposure to Grow
Advertising allows brands to improve each Stage of The Consumer Journey. Brands can impact Awareness to Loyalty with proper ad placements and creative. Limited to no advertisements makes it hard for brands to understand their consumers. As a result, brands might wait a while or pay a premium to attract new consumers.
Advertising's best feature is the ability to understand consumers. Extensive primary and secondary research allows for the discovery of consumer insights. The insights give a sense of the Brand’s awareness, consumer knowledge, and loyalty. In turn, advertisers can make campaigns that best match the Brand’s current Consumer Journey standing.
Awareness: A percentage of the product/service community is aware of the brand
Consideration: The community considers/compares the brand to similar products/services
Engagement: Users in the community engage with aspects of the brand
Conversion: Members within the community complete specific brand actions
Loyalty: The brand generates product/service advocates and high-frequency users with a positive sentiment
The Tweet below lists the stages and example questions. Consumers ask different questions for each stage of the consumer journey. Every stage presents a problem and solution.
The impact of advertising goes beyond the Consumer Journey. Brands gain consumer behavioral benefits. There are 5 key behavioral benefits advertisers can measure:
Awareness: The extent a consumer knows about the brands
Recall: The likelihood someone thinks of the brand when given the general product or service category (examples: Sports Clothing)
Recognition: The thoughts/feelings after a consumer sees a brand’s logo
Sentiment: The consumer’s positive or negative feelings toward the brand
Loyalty: The target audience’s level of loyalty towards a brand (example: quick to switch brands or is a lifer)
Gain Insight into Your Target Consumer
Behavioral advertising research allows brands to understand consumer issues and potential solutions. Advertising researchers can use a variety of methods to dive into a consumer's mind.
1 v 1 Interviews
Focus Groups
Surveys
Observational
Each method presents unique product/service findings to an advertiser. The findings should help drive the campaign’s strategy as well as business recommendations. Many brands cut costs and maximize RIO through bare minimum research. However, extensive research is a must for long-term success. Most of the findings can last years or in some cases forever.
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