Does Advertising Work?

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Scenario: "Dude, we can't do advertising. Advertising sucks. eBay and YouTube don't do it. Yay!" We hear the so-called 'experts' telling you: 'Advertising is on its way out! It's the new economy! It's all about word-of-mouth! Yay!' (Yes, 31,000 articles. Oh-fo-mutha-shizzle.) Does advertising work? Of course, it does. Before any expert preaches that advertising doesn't work, tell em: "Hey! I don't want your books!" (We challenge those 'experts' to find just one high-income-growth company who doesn't advertise.)

Why Advertising Works

Do this two-step process:

  1. Think of a distant acquaintance.
  2. Now, think of a friend you see often.

If two of them were in a room full of other people, who do you gravitate toward? For a ridiculous majority of us, we'll approach our friend. Arizona State's Psych Guru Robert Cialdini calls that the familiarity principle. That is, the more you see something provided it's under a positive light, the more you like it. In other words, the more that people see your company (whether that's a newspaper ad, website visit, TV exposure, etc.) -- subconsciously, the more they'll like it. And -- if deciding between your brand and a more obscure one, guess who wins?

Does Advertising Work For Every Company?

For most part, yes -- if you do it right. Placing a Super Bowl ad for your new product, and hope that'll convert a billion dollars? Not a chance. That's how internet companies earlier this decade imploded: They threw all their marketing eggs into one basket, hoping the masses would latch on. They never did. Instead, advertising takes a continuous "test-see-act" approach for your company.

How to Advertise

It's a continuous cycle that continually loops through three steps:

  1. Test

    Small tests. Don't break your bank. You want to test as many marketing media as you can. Whether that's direct advertising, cost-per-click campaigns, cold calling, commercials, or yadda, test a variety of mediums to see what works best.
  2. See

    Notice the results. What returns a juicy ROI? What doesn't? Rank each marketing method you do by the cost-per-acquisitions.
  3. Act

    For the advertising mediums that worked best, dump a great percentage of your marketing dollars into them. For the other less successful ones, hold back those marketing dollars.
  4. Cycle: Repeat ^1.

    Endlessly seek ways to knock off your ^1 ad variation; that ensures you're optimizing the shizzle out of your marketing dollars.

Think of the ATP tennis tour. When the organization finds its ^1 player, does it close the Pearly gates and think 'mission accomplished?' Fat chance. Instead, it continually finds, promotes, and refines players who could take over that ^1 spot. If you're a true business badass rock star, finding your tops ads will never be a mission accomplished.

Advertising = Good

Advertising gets absolutely -- and unfairly -- tarnished for being old school. Then, unsuspecting entrepreneurs build businesses thinking: "Hey, advertising is so Business 1.0. You can't build a business advertising. Yay!" And, then uh-oh: No sales, no cash-flow, no nada. Business = done. Don't be afraid to advertise. You'll uncover some pretty sweet surprises. And yes, even the companies that the experts tell you don't advertise -- really do.

Advertise your shizzle.


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Posted on January 30

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