Advertising. You need it to generate customers. You need it to create exposure. You need it to make money. Advertising is the core of any business function, whether you advertise in the newspaper or online, you’re spending money to make money.
The essence of advertising is based on investing your hard earned cash and hoping to make a profit. Most people don’t realize that advertising is really a simple numbers game. Most people are advertising with the attitude of “Hope”.
If you place an advertisement and HOPE you’ll generate customers without cracking down your numbers, you’re seriously wasting heaps of money in the long run. Sure you’ll hit a few home runs every now an again but if you always run your advertisements on HOPE then your business is put in a very risky position.
Fundamentals of Advertising
The basic fundamental of advertising is this.
You make more money than you put into your advertisement.
If your advertisement loses money, then it’s a loss.
If your advertisement makes money, then it’s an investment.
It’s that simple.
A lot of people get emotional hang ups on advertising. They place an advertisement and hope it does well. By doing this, once again, you’re placing your business at extreme risks.
Even though it may sound strange but you must remove all emotion when it comes to advertising.
My Story Of Advertising
I remember many years ago I was struggling to keep my first business a float. I was running out of cash fast and was delaying to pay my bills. It was extremely frustrating and stressful to watch my business go down the tubes.
During this time, as my emotions was running high and I started to make a lot of mistakes and gamble as well.
In my HOPE to turn things around, I decided to take a risk and withdraw my last $1,000 from my savings account and place a quarter size advertisement in the newspaper. I was literally shaking when I was doing this and I couldn’t sleep at night.
Finally the day came when the newspaper was released and I remember waiting by the phone expecting phone calls. Hours pasted and no phone calls. No responses and hence no sales.
I just flushed my last $1000 into the toilet.
That was a really harsh day for me. To work extremely hard at something and to watch it go down the tubes is a very painful experience and I wish it doesn’t happen to you.
After several months of licking my wounds and trying to figure out what went wrong, I discovered the main problem with that particular type of advertising disaster.
I assumed that by spending big money and speculating that it will make money was the problem.
It’s like in real estate, many people buy a house and speculate that the house prices will go up. Unfortunately, after many years of paying down the mortgage and expenses, they find that it doesn’t go as high as they wish it could be and end up losing their source of income to pay for it.
One real estate millionaire once said:
“Never ever speculate in real estate. You make your money as soon as you buy, not when you sell”
Another fantastic quote I’ll always remember is this:
“Cash flow first, capital second”
This is the same with advertising, you never want to speculate that you’ll make money, you must do everything you can to make your advertising campaign work.
The Ultimate 3 Steps To Advertising Your Business Effectively So You Can Make Some Cash
Below is a list of steps in which you can apply to start advertising your business online or offline effectively. I’ve personally use these steps all the time with great success.
Step 1. Target market.
Whenever you advertise your business, you must always figure out who your target market is. What age are they? What’s their demographic? What’s their interests? What websites do they visit? What books do they read?
You want to get as much information as possible from your target market.
For example, when I advertised my web design advertisement in the newspaper, I thought that that’s where my target market was. It wasn’t, my target market did not use the newspaper as their main source of reading.
Instead, the newspaper I was advertising in comprised of employees not employers and hence they had no interest in creating a website for their business.
That’s my $1000 lesson for you my friend.
Step 2. Find them.
Once you’ve figured out where your target market hangs out and what materials they read, you want to go to those places and look at how much it costs to advertise there.
Most of the time, these places are small but highly targeted medias. For example a dog training magazine is a lot cheaper to advertise in than a general newspaper. Do you think you’ll find more dog trainers in a dog training magazine than a newspaper? Of course not.
Step 3. Work out your costs.
Once you’ve figured out how much it costs to advertise your business, it’s time to work out your costs.
Now this is where the rubber meets the road. You need to work out how many sales you need to make to pay off your advertisement. Remember, you want to remove as much risk as possible from your advertising campaign so therefore, make sure you make it extremely easy for you to win.
You want to increase as much probability of success from your advertisement.
For example, if you did your costing and found out that you would need to make 1,000 sales in order to pay off your advertisement, then you’re going to have to do some extremely creative and persuasive writing to convert those people into customers.
However let’s say it will only take you 2 sales to pay off your advertisement, then the chances of success is a lot higher.
Now what about the number of people looking at your advertisement, would it be a low number such as 10 people or 100 people? Obviously, you want to have a high number of targeted people viewing your advertisement and a low number of conversions to break even on your advertisement.
How Do You Eat An Elephant?
One bite at a time.
Look, it takes practice to write compelling ads. It takes practice to advertise effectively. You may lose money in the process, however, view your “failures” as stepping stones to success. Your “failures” are just investments and seminars into how to advertise properly.
Once you create a winner, you’ll be hooked and the fortunes follow.
Good luck and let’s start generating income from your advertisements.