• Once your audience knows about your business, they enter your sales funnel where you then continue to educate them on what you offer and the problems you can solve.
• So where does advertising fit in? Advertising allows you to tell people about your business and promote your products and services. Advertising is predominantly paid, either online or via traditional channels such as print media.
• When used strategically with other marketing methods, advertising is an effective way to get people into your funnel and keep them close. Learn everything you need to know about online advertising for small businesses in this guide.

In this article, we will cover three key areas:

1. Overview of Advertising 
2. Successful Advertising
3. Online Advertising Campaigns

1. Overview

What are the different types of advertising?

By Rachel Allan, Visionary Group

Advertisements can be found anywhere that can capture people’s attention. While this isn’t an exhaustive list, there are several ad types:

• Online ads: Search engine paid listings, website banners, social media, email and affiliate ads
• Mobile ads: Ads in mobile applications and software
• Print ads: Newspapers, magazines, brochures, direct mails, and local publications
• Broadcast ads: TV, radio and music streaming apps
• Product placement ads: Found on physical products such as free gifts
• Outdoor ads: Billboards, local signages, posters, flyers, and any ads on vehicles and at public places.

Where does advertising fit in my sales and marketing funnel?

You’ve probably heard this – people need to know, like and trust you before they will do business with you. Once people know of your business, they enter your funnel. You then continue to educate them on what you do and the pain you can solve.

They start to like and trust you. It is at this point they will spend money with you, investing in the solution you have to their problem. This is the role of the sales and marketing funnel.

Where does advertising fit? Advertising is telling people about your business or the products and service you offer. Advertising is only one of the methods of promoting your business. It is typically paid, think magazine, newspapers, Google & Facebook ads.

You have full control over placement, content and budget. You can also measure the effectiveness of the ads. When used with a mix of marketing methods, advertising can be very effective at getting people into your funnel. Provided your ads are being seen by your target market, and the next steps are clearly laid out for them.

Did you know that people need to see your business up to 12 times before they will interact with you?

2. Successful Advertising

What makes a successful advertisement?

There are 6 qualities of a great advertisement: 

1. It's simple and straightforward

A great ad is simple, memorable, easy to understand and gets straight to the point. Remember that the average person sees, reads or watches hundreds of ads in a week, which makes it easy for people to drop off if they can’t understand your ad.

2. It stands out

Don’t be boring. You need to grab people’s attention and be different from not just your competitors, but other ads. Make your ad worth the few seconds of attention it gets. This is where you need to pay extra care to your headlines, taglines, jingles, theme songs, images and videos. The right combination can be powerful and unforgettable.

3. It uses urgency, scarcity or exclusivity

If relevant, you should feature something that’s urgent, scarce or exclusive to the audience. This is one of the psychological tactic of selling and is effective when used in an ad.

4. It adds social proofing

Customer testimonials and feedback can be powerful in an ad to indicate popularity, trustworthiness, and capability to the audience.

5. It addresses fears

Another hallmark trait of an effective ad is one that addresses the fears your target audience may have about your product or service. By removing the fear or doubt, you are showcasing that you can and care about solving their problems.

6. It has a clear call-to-action

If you require your audience to do something, such as visit your website, buy, sign up or call, then you must make it clear to them and make it as easy as possible for them to do it. This is where most ads fail with no follow-through.

How do you run a successful ad campaign?

There are 8  steps to create a successful ad campaign: 

1. Define your finishing line

Many advertising campaigns start off on the wrong foot by measuring too few, too many or irrelevant metrics. Whether your goal is to increase brand awareness, repair brand perception, increase sales and leads or download a freebie, this must be the first thing that’s defined in your campaign.

2. Target the right audience and medium

It’s impossible to reach out or appeal to everyone. The best ad campaigns know who their audiences are, where they hang out and what they want. Nail this and you’re off to a good start.

3. Sell “what’s in it for them?”

The whole campaign should be built around selling a benefit for the target audience. Every message you send out should help convince them that your brand, product or service is the best option for their needs.

4. Consider the ad funnel, not just one ad

Think of the journey that a target audience goes through at every touch point. Where do they go after seeing the ad? Don’t leave them hanging or lead them down a rabbit hole. Perfect each interaction from landing pages, websites, phone, email to face-to-face encounters. Concentrating too much on one ad means you’re only delivering a fraction of the promise.

5. Test, test and test

It’s not just about testing the ads, you need to make sure every touch point works correctly. It should also be simple to use and flexible for the audience.

6. Be consistent

Consistent messaging at every part of the ad funnel is the key to leave a good impression on your audience. If you’re selling the benefit of lowest prices, make sure the audience are reminded of this throughout. At times, you’d be hard pressed to achieve this in just one campaign, so keep this in mind when planning.

7. Monitor and review

Have regular reviews and be ready with a backup plan in case something bombs out or fails to go according to plan.

8. Budget appropriately

Your campaign’s budget should consider factors such as the advertising platform’s reach, slow days, seasonal changes, consumer behaviour and expectations. For example, avoid spending the same amount for low and peak times.

3. Online Advertising Campaigns

By Kirsty Saint, Social Saints

How do I define my online advertising campaign objectives?

The most crucial step in creating any online ad campaign is to define your objectives. Without first being clear on which is important to you, your campaigns might not deliver the results you want. Is your goal:

• For brand awareness, so people know you exist, or to reaffirm your existence in the marketplace?
• For engagement, where you want as many people as possible to comment, like or share your social media post?
• To drive traffic to your website so people read more about your services?
• To drive foot traffic to your physical store?
• To encourage people to subscribe to your email list (usually by providing a free download or offer)?
• To build a warm audience that you can show ads to later, with a special offer for your product or service, also known as retargeting?
• To prompt prospective customers to book a call with you?
• To achieve online sales of your products or services?

Tip: Even if your goal is brand awareness, you will want to show ads that result in conversions at some point.

Be careful what you wish for...

Today’s online advertising platforms are incredibly sophisticated in finding the right people for your business. However, most advertisers don’t realise that not all campaign objectives are created equally.

In Facebook’s Business Manager for example, you have an array of options to choose from when creating a campaign:

Facebook knows the usage and behaviours of its users. It will show your ads to people who are likely to take the action you desire, based on their past behaviours.

Interestingly, people who like or comment on many of your ads are not always those who will visit your website or purchase your services. A sale is not the next logical step simply because someone commented on your post.

This is especially the case with products or services people don’t want their family and friends to know they’re interested in. These may include financial services, debt recovery, medical treatments, marital counselling, or even newly-expectant mothers purchasing baby items before publicly announcing their pregnancy.

If your products or services fall into a similar territory of confidentiality, an engagement ad might not achieve the results you hoped for.

The bottom line: if you want engagement, ask for engagement. if you want conversions, ask for conversions

What metrics are used in online ad campaigns? 

Some platforms such as Google and Facebook provide a Quality Score and Relevance Score that allows you to monitor whether your ad is resonating with your target audience. Social media ads can also track engagement, video views and post shares.

Meanwhile, pay per click ads (PPC) allow you to track:

1. Number of clicks

This is the amount of people who have clicked the link from your ad. On Facebook, this figure can also include clicks to expand and read your post, so the right type of click can be set up in your reporting columns.

2. Cost per click (CPC)

CPC is an indication of how well your ad is performing in a competitive marketplace. Keywords used by many competitors will result in a higher CPC in AdWords. Similarly, on Facebook, CPC is an indication of the level of competition to reach your target audience, and how well your ad is performing compared to others.

If your CPC is higher than $1- $2 on Facebook, test other audiences to see if you can gain a competitive edge. If it’s expensive on AdWords, research more keywords to find those with less competition.

3. Click-through rate (CTR)

The CTR helps determine if the keywords are relevant to your audience. Similarly, on Facebook the CTR tells you if your ad appeals to your audience. A low CTR (under 1%) is a strong indicator that your keywords or ad creative should be reviewed and revised.

It can also indicate your landing page needs improvement – test different content, imagery, headlines and colours, and importantly, make sure a slow page load speed is not deterring potential visitors.

4. Number of impressions

The number of people who have seen the ad.

5. CPM (cost per 1,000 impressions)

Like CTR, CPM reflects how well your ad is performing in a competitive marketplace, although this can vary according to other factors that may be outside your control.

• Conversions (usually a sale, booked call, or subscription to email list)
• Cost per result
• Conversion rate

Conversions tell you how many people took your desired action, and is the best indicator of return on investment, and whether your ads are running profitability. If you’re selling a product worth $200, for example, your cost per conversion should be considerably lower.

The conversion rate is also a good indicator of the performance of the landing page people visit when they click on your ad. This is provided within AdWords’ reporting but needs to be manually calculated for Facebook (conversions divided by clicks).

To read the success of your campaign, make sure you’re focusing on the right metrics. However, if your conversion rate is high, and your $200 product is selling at a cost of $1 per conversion, don’t worry if your CPC is high and your CTR is low.

Why should I never skip conversion tracking?

If your goal is to encourage people to purchase, sign up or book a call, you’ll need to track this as a conversion. Skip this step and you’ll miss out on accurate reporting, and the compounding effects can be bad for your campaign and wallet.

This is especially true if you advertise on Facebook, as its algorithm uses your conversion data to optimise for more conversions. It does this by matching data points with people who have taken your desired action, and then shows your ads to more people just like them.

Remember to check your results at least every few days and adjust when the metrics indicate an issue. You’ll also be able to optimise different elements of your campaign targets, ad creative and landing page to continually improve.

How much should you spend on online ads? 

Online ads present an opportunity to reach hundreds of thousands of people, at just a fraction of the cost of advertising on television, billboards or in print publications.

But how do you determine how much to spend?

In my consultancy, business owners often tell me they want to grow their business, but are reluctant to spend money on advertising, or have allocated only a tiny budget. And I can understand why.

We constantly hear stories of how someone spent $100 on Facebook, LinkedIn or Google Ads and made a gazillion dollars in return.

However, when people try the same method by spending $100 and achieves no sales, they conclude that online advertising doesn’t work for their business model. Combine this with the reality that most of their customers and sales came from free referrals or word of mouth, and business owners can become complacent about investing in ads.

Make no mistake. Marketing is an investment in the growth of your business. It’s no different to the rent you pay, the equipment you purchase for your storefront, or the stock you order from suppliers to generate a profit.

Where can you advertise online?

The paid online advertising options for your business are endless. Moz have outlined the different online channels by average cost, average effort and ROI, but the most common are:

• Pay-Per-Click Advertising (PPC) or paid search listing for specific keywords on search engines (e.g. Google AdWords)
• Social media advertising (e.g. Facebook, Instagram, Twitter, LinkedIn). This is like PPC, but is interest-based rather keyword-based, and can involve other objectives, such as brand awareness, in-store visits, and engagement.
• Display advertising, often in the form of banner ads on industry or websites.

Most small to medium businesses start with the goliaths in the online advertising space – Facebook and Google AdWords. The easiest way to choose is to consider where your customers are, and which platforms you’re most comfortable with.

Keep in mind that that running a single ad might not achieve your business goals by itself.

Most marketers agree that multiple exposures or ‘touches’ are needed before a potential customer feels familiar enough with your brand, product or service to make a purchase.

The number of effective touches was previously thought to be 7, but this has increased with the growth of our digital world. Research by Schmidt and Eisend shows that at least 10 exposures are now necessary to maximise customer response to an ad.

For marketers, this is translated into the sales & marketing funnel, and seeks to move prospective customers through awareness, consideration and purchase stages.

For example, a funnel for a nutritionist promoting in-person consultations may include:

• a brand awareness ad
• a couple of blog articles
• a free eBook in exchange for email subscription
• several email newsletters
• a visit to a booking page on their website

And this funnel will often start and end with an online ad.

How do you calculate online spend formula?

There is a simple calculation to determine this, however, you may need to make some estimations to start.

Once you’ve been advertising for a while, you’ll know exactly how your key metrics are performing, and you can determine your required ad spend budget with greater accuracy.

Step 1: Firstly, how many customers do you want to add in 1 month? If your goals are revenue-based, divide your total revenue goal by your average sale value, to determine how many new customers you need. E.g. Goal = 10 new customers a month

Step 2: Next, do these people become customers in-store, from free phone consultations, or by buying on your website? How many website visitors or people do you need to speak to for each sale? If you don’t know, estimate. E.g. For every 5 phone consultations, 1 becomes a customer.

Step 3: Multiply the number of enquiries or visits by the number of new customers you would like each month. E.g. 5 enquiries x 10 new customers = 50 scheduled phone consultations required to reach the monthly goal.

Step 4: Here’s where we bring your ads into the picture. Let’s say we show an ad on Facebook that sends people to a landing page to book a free phone consultation. What percentage of people who visited that page booked a free phone consultation? If you don’t know, use an industry average here of 10%. This is your landing page conversion rate.

Step 5: Divide the number of enquiries you need to reach your goal by this landing page conversion rate. E.g. 50 enquiries divided by 10% = 500. This is the number of clicks required to meet your goal.

Step 6: What is your cost per click (CPC)? If you’re already running ads, you will be able to see this within the advertising platform. If not, use the industry average of $1 if you’re using Facebook ads. For Google AdWords, use the estimated CPC shown for your keywords in the Keyword Planner. For display ads on other platforms, request an estimated CPC. 

If you are running a series of ads (or a ‘funnel’) to move prospective clients through brand awareness and consideration before purchase or booking, calculate the average CPC of the ads in the series.

Multiply your CPC by the number of clicks you need. E.g. 500 clicks required x $1 CPC = $500

This final figure, $500, is the approximate monthly advertising budget you will need to bring 10 new customers into your business.

Ultimately, test and see which type of campaigns and platforms provide the highest return on ad spend, before committing a large budget. Invest in the marketing budget that you can afford. Remember that there are no guarantees in online advertising, but don’t think you can get by without spending any money for it.

Should I run my own ad campaign?

You can run your own ads on Facebook or AdWords, for example, but don’t underestimate the learning curve to do so. If you don’t have the time to invest in learning how these platforms work and how to optimise your campaigns, you’ll be left behind by specialist advertisers in the auction process, resulting in a significantly higher cost to advertise and lower conversion rates.

If you try to do it all yourself, it may also distract your genius. You’re not in business to become the best marketer out there – you’re in business to do what you do best.

In this case, you may need to consider more than ad spend. For your ads to be affective, it must be engaging and emotionally appealing, and your audience or keywords must be well defined. You or your employees may not have this skill set.

You can outsource your advertising, or at the very least, get some coaching or consultation from a specialist to show you the basics, help you develop an advertising funnel strategy, and guide you in your campaigns.

Learn More

• How to Advertise Your Retail Store to Win New Customers
• This is How You Should Advertise Your Tradie Business
• How Restaurants Can Advertise For Cheap