Have you ever wondered, how can advertising help a business? In short, it helps your business grow.
Benefits of small business advertising include attracting new customers and helping you sell more products and services to existing customers. It can increase profitability, too, by helping increase order size.
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What Does Advertising Do?
Advertising helps change outdated or negative perceptions of your business, if needed. Advertising can also increase visibility within your industry, helping you attract partners that can expand your business.
Indirectly, advertising helps you grow word of mouth referrals. The more new customers you gain through advertising, the more word of mouth those customers in turn will share with others.
To sum it up, when trying to answer the question “how can advertising help a business?” you can see how it brings in more top line revenue, and drops more to the bottom line.
| Role of Advertising | Impact on Business | Insights |
|---|---|---|
| Changing Perceptions | Advertising can alter outdated or negative perceptions of a business, potentially improving its image. | Advertising serves as a powerful tool for reputation management, allowing businesses to shape public opinion and address any misconceptions or challenges they may face. |
| Increasing Visibility | Advertising can enhance a business's visibility within its industry, attracting potential partners and collaborators. | A strong advertising presence can position a business as a leader in its field, making it more appealing to potential partners and creating opportunities for growth and expansion through strategic partnerships. |
| Growing Word of Mouth | Indirectly, advertising can lead to word-of-mouth referrals, as new customers acquired through ads may recommend the business to others. | Advertising not only directly brings in new customers but can also set in motion a chain reaction of referrals and recommendations, amplifying its impact beyond the initial audience. |
| Boosting Revenue | Advertising contributes to increased top-line revenue by attracting new customers and driving sales. | Effective advertising campaigns have the potential to generate significant revenue growth by reaching and persuading a wider audience, ultimately increasing sales and revenue. |
| Improving Profit Margins | Advertising can contribute to improved bottom-line profitability as increased sales can offset advertising costs. | While advertising involves expenses, its ability to drive revenue growth can result in improved profit margins and long-term financial sustainability for businesses. |
The Benefits of Small Business Advertising
Let’s drill down to understand exactly how advertising can help a business, depending on your industry. But in reality, what does advertising do? Here are 18 benefits of small business advertising:
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Increase Foot Traffic
For brick and mortar businesses, advertising in newspapers, magazines, television and radio can get more customers in the door.
Generate Leads
For B2B businesses, advertising can fill your sales funnel and help you get more leads for your sales force to follow up on.
Introduce New Products
For software or consumer manufacturing businesses, advertising can help launch products with a splash.
Highlight Product Enhancements
If your business has an existing product or service, advertising can make the public aware of improvements. Letting the public know about your innovation can boost sales.
Get Traffic to a Web Page
For online businesses, advertising can attract people to a landing page where you can convert the visitor into a customer.
Improve Brand Awareness
Advertising keeps your business top of mind so consumers think of it when they require a service. This is especially good for service businesses such as HVAC or pest control. But almost any kind of business can benefit.
Spread the Word about a Sale or Special Promotion
For any kind of retail business, advertising can make the public aware of a sale or promotion bringing in more customers in the process.
Drive Immediate Online Sales
For ecommerce businesses, advertising with pay-per-click ads can bring online sales almost immediately. PPC ads can move the buyer to act as soon as they see your add and click on it. It’s direct response!
Lift Brand Image
For businesses in industries suffering from an outdated or poor perception, advertising can transform public opinion creating a more favorable impression. For example, advertising can make people aware of expanded capabilities or offerings.
Boost thought Leadership or Industry Profile
If you are a consultant or run a tech company and want to be known for your expertise, advertising can help. Native ads can promote your content demonstrating your expertise and building your reputation as a thought leader. Sponsoring content that features expertise also raises your profile and helps attract industry partners.
Announce a Store Grand Opening
Use outdoor advertising, newspaper ads or mailers to publicize a new location. Get more foot traffic.
Get Seen by Local Searchers Online and in Phones
For local businesses, it’s critical to be seen in maps search and mobile search. That way you attract those searching for a restaurant, shop or other business right in your area. Start with a free Google My Business page and Bing Places for Business page. But don’t stop there. Get more visibility by promoting your business with Google or Bing ads.
Beyond the search engines, get listed in local directories. Use a listing service such as Yextto make sure your local business’s address, phone, hours and other information is accurately propagated across the web to as many directories as possible.
Stand Out from the Competition
For businesses in crowded markets, advertising can set your brand apart.
Convert Online “Window Shoppers” into Buyers
Retargeting or remarketing ads can remind visitors of your products after they leave your site. This technique is proven to convert more shoppers into buyers. Let’s say someone abandoned a shopping cart in your ecommerce store or simply didn’t buy for some other reason. With retargeted ads, they will be reminded of the product by seeing an ad days later.
Grow your email List or Social Following
If you want to get more email subscribers or more loyal social followers, then social media advertising may be useful to accomplish these and other marketing objectives. Once people consent to receiving email marketing messages from you, or choose to follow your social posts, you have more chances to get your messages in front of them.
Increase Order Value
Advertise special bundles and order size incentives to increase your customers’ average order value. Example: offer “threshold based” coupons, such as 10 percent off every order over $150.
Boost your Content Marketing Impact
Content marketing is a powerful marketing technique. But advertising can give it even more impact. Share your content on social media, and then boost the social media update. It will get your content seen more widely and you will get more click throughs and engagement on your content — which in turn can help improve your search engine position. Or opt for sponsored content on a popular site, so your content is seen more widely.
Expand the Power of Word of Mouth
Advertising can help jumpstart and amplify word of mouth. About 85 percent of small businesses report they get most of their customers through word of mouth, according to a study by Small Business Trends.
But what if you could drive the word of mouth sharing by your customers even higher? The more new customers you get through advertising, the more happy customers you will have to share word of mouth praise about your business!
The above list is not exhaustive. But it should help you answer the question “What does advertising do?” and get you thinking about how advertising can help a small business better achieve its goals.
| Benefit of Advertising | Description |
|---|---|
| Increase Foot Traffic | Attracts more customers to physical stores through traditional media advertising. |
| Generate Leads | Fills the sales funnel and generates leads for B2B businesses to follow up on. |
| Introduce New Products | Helps launch new products with impact, creating anticipation. |
| Highlight Product Enhancements | Informs the public about product/service improvements, boosting sales. |
| Get Traffic to a Web Page | Attracts visitors to online landing pages for conversion. |
| Improve Brand Awareness | Keeps the business top of mind, especially beneficial for service industries. |
| Spread the Word about a Sale or Promotion | Informs the public about sales or promotions, increasing customer traffic. |
| Drive Immediate Online Sales | Generates online sales almost instantly through pay-per-click ads. |
| Lift Brand Image | Transforms public perception, improving brand reputation. |
| Boost Thought Leadership or Industry Profile | Establishes expertise and thought leadership through native ads and sponsored content. |
| Announce a Store Grand Opening | Publicizes new store locations, attracting foot traffic. |
| Get Seen by Local Searchers Online and Phones | Ensures visibility in local search and mobile search results. |
| Stand Out from the Competition | Differentiates the brand in competitive markets. |
| Convert Online "Window Shoppers" into Buyers | Reminds visitors of products through retargeting ads, increasing conversions. |
| Grow your Email List or Social Following | Expands email subscribers and social media followers through advertising. |
| Increase Order Value | Promotes special bundles and order size incentives to boost average order value. |
| Boost your Content Marketing Impact | Amplifies the reach and impact of content marketing efforts. |
| Expand the Power of Word of Mouth | Jumpstarts and amplifies word-of-mouth marketing, leveraging new customers for referrals. |
How Can Advertising Help Your Business? A Tale of Two Owners
Let’s look at two case studies to better understand the strategic benefits of small business advertising. Our case studies focus on two mythical business owners, Joe and Mary.
Joe, the Restaurant Owner
Joe owns a local restaurant with awesome food.
Like the majority of small business owners, Joe gets most of his new customers from word of mouth spread by happy current customers. He’s been proud of the positive word of mouth, as he should be.
He’s always avoided advertising, thinking he didn’t need it. And he didn’t want to spend the money. But his attitude toward advertising is beginning to soften.
Recently, Joe has started to feel as if his business is stagnant. He’s tossed and turned a few nights, worrying.
Weekends are good, but weekdays are slow. He feels the number of customers has plateaued.
Joe also is worried about falling behind the competition. Another restaurant a half mile away has expanded into new premises. The competitor is now offering customers free WiFi, food tastings, outdoor seating on a 3-season patio and more.
Joe is profitable and is getting by, but just barely. Without some profit cushion he can’t invest in the kind of amenities his customers are asking about.
The restaurant is starting to look a bit worn. He can’t afford the new booths and chairs needed for a facelift — let alone a beautiful new patio like his competitor.
He also doesn’t have the money to invest in new technology. As a result, his business expends a lot of staff time grappling with an ageing point of sale system.
Aside from lack of growth, he’s beginning to worry about his business shrinking.
Mary, the Gift Shop Owner
Mary also owns a small business — a gift shop. Like Joe’s restaurant, her business gets customers through word of mouth. She too is proud of that.
But two years ago she realized she had to reach out beyond her business’s current circle of customers and their referrals. So Mary started to advertise her business.
Admittedly, her advertising budget is small — nothing huge. But through careful planning and clearly understanding her target market, she’s been able to attract new customers and accelerate growth.
Mary has a written advertising plan. She tracks ad expenditures against results to make sure her business gets a good return on investment (ROI). After all, she doesn’t have money to waste.
By taking a calculated spending risk, she’s been able to profitably grow her business in double digit percentages. In turn, she’s earned the money to expand inventory to sell trendy artwork and unique gifts, upgrade the building sign (thereby increasing foot traffic), hold more events with refreshments and invest in a new ecommerce website to grow online sales.
Here’s something she wasn’t expecting: by advertising her business, word of mouth also increased! The more new customers Mary attracts through advertising, the more those customers talk about her business. This attracts even more customers.
In other words, Mary increased word of mouth referrals by advertising.
Mary didn’t just get a one-for-one return for her advertising dollar — she got more.
Seeing the Value in Advertising a Small Business
Can you see the differences between Joe and Mary when it comes to advertising?
Joe isn’t exactly a high-growth kind of guy, but he is beginning to realize the world around him isn’t standing still. He may be a little late to the party, but he now knows he has to make changes just to avoid losing ground.
Advertising will help him take charge to find new customers. He won’t feel the situation is out of his control. Advertising will give him a way to attract more customers.
And advertising will help expand his circle of potential new customers much wider than word of mouth alone can do. The extra money brought in through more customers gained by advertising, will fund the improvements he needs to make in his facilities and technology.
The main difference between Joe and Mary is that Mary realized much earlier she needed to do something. And she also recognized that an initial modest investment in advertising could pay off.
It wasn’t long before new customers were funding her business growth far beyond the modest amount she spent on advertising. She still advertises today to keep a steady stream of new customers.
For Mary, advertising was the first step in her overall strategic plan to make her business stronger.
So the next time you wonder “how can advertising help my small business?” just think of Joe and Mary.
Read the complete Small Business Advertising Guide:
- Introduction to Small Business Advertising
- How Can Advertising Help Your Business?
- What Is The Difference Between Advertising And Marketing?
- Where Can You Advertise Your Business?
- What’s The Cheapest Way To Advertise?
- Where Can You Advertise For Free?
- How Much Do Small Businesses Spend On Advertising?
- How to Plan your Small Business Advertising Campaign (Checklist)
- 50 Small Business Advertising Ideas
- How to Advertise Your Small Business Locally
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