Articles Sales and Marketing

When does it make sense for small businesses?

By Christopher Freeburn

The Internet has been a great leveling technology, evening the playing field between small and large businesses by giving small companies easy and cheap access to a worldwide marketplace. The Internet has also provided unprecedented advertising opportunities for small business, permitting not only access to a global marketplace, but the ability to target and alert potential customers on a local, regional, national, or global scale for a fraction of what traditional marketing programs would cost.

The Growing Online Ad Market
Internet advertising totaled over $21 billion in 2007, according to the Interactive Advertising Bureau (IAB), putting it far behind television, close to magazines, and ahead of radio as an advertising medium, based on ad revenues. According to the Pew Internet & American Life Project, more than 32 million Americans have made an online purchase after clicking on an online advertisement. Social networking web sites, which boast more than 86 million users are almost exclusively run on advertising revenue.

In testimony before Congress in June, Randall Rothenberg, president of the IAB, noted that Internet advertising is particularly advantageous for small businesses. "Online advertising has created regional markets out of local markets, and national markets out of regional markets. Items once sold in local garage sales and pawn shops are now available nationally and internationally via advertised interactive auctions, in which some 40 million Americans participate annually," he said. "Importantly, the online networks not only enable small businesses to communicate to niche communities through small sites; they allow large brand marketers to reach narrow communities as well, contributing to an unprecedented democratization of the media landscape."

So, how do you get your company's ads on the web?

Advertising options
Before selecting a particular type of online ad, you must determine what works best for your business and suits your level of online capabilities.

Search Engine Advertisements
These ads are posted on search engines' web sites. Since most people begin their Internet browsing with a visit to a search engine, advertising on these sites is often a logical place for a small business to place its ads. The two largest search engines, Google and Yahoo, have created advertising programs tailored for small businesses that want to advertise on their sites. The ads usually appear as links to your business, highlighted and set apart from the other links generated by the search. The ads appear whenever a user searches for specific keywords or phrases in the search engine. These keywords or phrases will be related to the sort of product or service your business offers. So, for instance, if you run a business providing surfboards, you ads would appear whenever someone searches for information on surfing. Other search engines offer similar programs.

The cost of these advertisements varies and is often dependent on how many people actually click on the ad and visit the advertisers web site. Each time a potential customer clicks with their mouse on the ad and visits the advertiser's web site, the advertiser must pay a "click fee" to the search engine. Such fees are usually pennies per click, depending on the search engine hosting the ads.

Search Engine Optimization
Search engine use is so popular, and the traffic generated by search engines so considerable, that in addition to posting "pay-per-click" ads on search engine web sites, many businesses seek to "optimize" where their web site will appear during a keyword search. Search engines scan millions of web sites every day, tagging them according to key words and phrases that appear on the web site. When a user searches for a word or phrase, the search engine lists web sites whose content has been tagged with that word or phrase.

In order to improve the number of hits your website receives from search engine queries, a number of online media firms will "optimize" your web site's content. These services start by examining the type of customers who comprise the market for your products or services and will adjust your web sites content and language so that the programs that scan and tag web sites will be more likely to list your web site near the top of lists generated for a given keyword or phrase. Fees for this service vary among search engine optimization firms.

Banner Ads
Usually appearing as rectangular patches or horizontal bars containing text, pictures, animation, or company logos at the top or bottom of web sites, banner ads date back almost to the beginning of commercial Internet use. Internet users who are interested by the ad will be directed to your company web site when they click on it. Most banner ads use simple HTML code to convey text or pictures, but more complicated ads can be created using popular multimedia applications like Java and Flash. The latter, while more eye-catching, are considered somewhat risky since many browsers do not come with Java or Flash software built in, and consumers are not likely to wait to download and install such software just to view your ad.

Banner ads are deployed on other web sites either by direct agreement with that web site for a specific consideration (you pay another web site owner to host your advertisement, or agree to host his or her banner ad in exchange), or by paying a banner network company (such as DirectClick or Flycast) that will post your banner ad on a number of web sites for a specific fee.

Pop-Up Ads
A Pop-Up ad is a paid advertisement that automatically causes a user's browser to open a new window when visiting a particular web site. The new window, which is
generally small and opens in front of the page the user intended to open, contains the advertisement. Unfortunately, while eye-catching, numerous surveys of Internet users indicate that most people find them highly irritating, and many browsers now come with features to disable pop-up windows. Thus, pop-ups have declined significantly in popularity and are now considered a poor advertising choice.