Does Advertising work? -
A Digital analysis of Silicon Valley Internet Advertising
Advertising does not work. At least, not in the way most people expect. According to the New York based company Newtek Business Services, there are 24.7 million small business owners in the U.S. and growing at the rate of 14% per year. If the advertising model most small businesses think works, then they would all have a Super Bowl commercial. You see, many small businesses believe the advertising ROI (return on investment) dollars, equates to a positive cash flow. If there were some type of guarantee that for every advertising dollar spent, a return of 10% or greater could be realized, everyone would have a prime-time television, radio or magazine ad campaign!
Digital Advertising vs. Television Ads
The 2013 "air time" for a 30 second Super Bowl ad costs about $3.8 million dollars to run. That does not factor the cost to develop, produce or hire the actors to pitch the product for this 30 second spot. If advertising worked, if a return of $3.9 could be guaranteed everyone would have a Super Bowl commercial.
For more than 30 years Ford has been the number
one selling truck in the United states; with Chevrolet, Dodge, GMC
and Toyota all spending huge amounts of cash advertising their
competing units. To some it may seem a very risky move for Ford to
cancel their Super Bowl ad campaign, but then again Ford took no
bailout money. "Customers are spending as much time with the mobile
smart phone or online as they are watching TV now, so our
advertising dollars have to flow to where the people are," Ford's
marketing chief Jim Farley told Reuters in an interview in November
2010. What does Ford know that no one else does? Look for Ford to
advertise the Lincoln Navigator this year.
This idea that sending the marketing or advertising message to "where the people are," just might catch on. According to 2012 INC magazine, A whopping 86 percent of consumers say search engines are very important in the buying process, while just one percent use social media alone. Silicon Valley is responding quite slowly to advertising models that don't use "retargeting" (cookie based tracking habits of consumer Internet interaction technology.) Door open for Duckduckgo.com. Privacy and "cookie tracking" should be a major concern to Silicon Valley. with regard to Internet Marketing, Advertising and Online Privacy.
Small Business Advertising
For small businesses there is very little argument that falling ad
revenue is leading to the apparent demise of newspapers. Circulation
is dropping because many people are not getting their news from
newspapers. When circulation declines ad revenue drops. There is also not much argument about an obvious lack of
Yellow Page usage. Many traditional advertising agencies have
enjoyed a real time, "disconnect" with the consumers of their
clients. They are creative and media buyers in the "good old boy
network". Many small businesses do not even have an advertising
budget let alone an ad agency. The mantra from traditional
advertising agencies is "test, test, and test" to track and see what
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