The facts are hard to argue with. If you advertise in the yellow pages, a classified ad, brochures, or any printed media and you don't have a web site, you are throwing money away! Since 1999, every survey has indicated that if you have a web site address within your documents, advertisements, and other features, you improve performance of that feature by 10%-20%. You can even check the effectiveness of all types of advertising (print, TV, radio, and Internet) through log services. Internet advertising takes many forms: search engine and listing services, actual advertising and marketing management services, and inclusion in other media forms.

A web site is one of the least expensive ways to advertise your business.

Furthermore, it is one of the best ways to augment and increase the effectiveness of other advertising efforts.

Advertising and its cost

We don't consider the Internet the 'only' media in which to advertise. We advertise our services in all media. Our parent business has been in operation since 1973. It began national advertising in 1982. As business consultants, we understand that the return on investment is always a key component to determining the success of any operation. This applies to advertising as well.

Advertising a business in any major newspaper is costly. If you have not checked this option lately, do so now. A classified ad for a business does not receive those nice benefits they advertise for others. Business advertising is costly. You can only get about 18 to 25 characters per line in a classified ad. A simple ad will cost more than $100 for each day that it is displayed. You have no control over its final placement, just its category.

A display ad costs between $100 to $1,000 per display. The dollar amount depends on the magazine or newspaper's circulation and other factors. Again, you have almost no control over its final placement. It could be buried next to a larger ad, or in a corner that you did not want.

Newspaper and magazine advertisements are nothing in cost when compared to the cost of advertising on television or radio. You have better control over when the ad will be aired, but cannot guarantee that the content immediately before or after will be complementary to your effort. The cost of production for these ads can be as little as $1,000 to millions of dollars. A recent ad that ran during the Super Bowl was made specifically to be displayed only once. It cost tens of millions to develop and display for that one time. The audience number that saw it was large, but how many went out to get popcorn during that ad?

Yellow page advertisements are often quoted as being effective. However, examine the number of businesses that keep a large ad more than two years; few seem to stay. This implies that many businesses don't feel they got the kind of return they wanted. The effectiveness of these ads varies upon how the average customer looks for your business. If they use the yellow pages, and many do, then a large yellow page ad may help. A small display ad in the yellow pages requires a full one year contract and costs about $250 per month. A quarter page display ad costs more than $1,000. Of course, the actual cost depends on the location (city, region, etc.) for the directory. Further, an additional fee is required to get into the other area directories within a large metropolitan region. (You have the main directory charge, and then that of local or regional directories.)

On the Internet, each document that is displayed on the person's screen is referred to as a "page." A full Internet page of up to six typewritten pages costs from $200 to $350 to develop. The cost for hosting of that page for a full year ranges from $162 (pages within a fully supported "suite^tm") to about $5 on a domain or mall suite with expert review and maintenance. In most cases, it is not wise to place much information on a single page. As a result, several pages (documents that display) may be needed for various subjects. However, the cost to generate each page is relatively constant, as each page has a significant amount of overhead that is unique to that document - and how it performs for the customer on the Internet.

Frequency of display

One consistent feature about any advertising is that 'repetition is the key.' A single ad in a newspaper may produce no results, whereas a continual run each Sunday will began to produce a consistent return. Thus any discussion about advertising needs to recognize this feature. Run one ad in the newspaper, even if it is a full page display, and the result may be dismal.

Measuring advertisement effectiveness

If you advertise in a newspaper or magazine, you cannot have any idea how many people actually saw the ad. There is no way to accurately track this. You can pay for a study to examine behaviors, but the study will cost you several thousands of dollars. Such studies are good to determine general patterns, but not a practical option to determine the effectiveness of a single advertisement.

Television and radio have ongoing tracking systems that give a fair idea of how many had their equipment on during the time period the ad was aired. Yet, it still takes a pricey statistical study to determine how many actually heard it, versus those that just had the equipment running at that moment.

The effectiveness of Yellow Page ads are hard to track. To do this, people answering the phone must be trained to identify where the call came from. It is possible to have the phone company assign a special number that is tracked, but this causes a loss of identity for the firm. Sometimes it is just not possible to find out where the potential customer got the information that generated the call. That would cause them to disconnect. A Yellow Page ad has a special requirement attached to it. It is phone based and people expect a REAL PERSON to pick that line up. If they don't get that, many will disconnect and the contact will be lost. That means that the support necessary - to have a person always available to the phone line - is needed, and a backup is needed. Thus, to measure its effectiveness, any added cost for a person to answer and the backup must be determined too.

On the Internet, if the web site page is hosted on a real business server with full business services (such as those offered by OfficeOnWeb), you can very easily - and at minimal cost - accurately determine exactly how many times the ad was examined, estimate how many people were actually involved, and measure the number of actual contacts to actual ad examination. Since the ad is based off a computer, the effectiveness of the ad can be determined in a way that no other media has been able to attain. Expertise in understanding the data is needed, but it is readily available. Further, the comfort and security of the visitor does not need to be compromised to gather it. (You don't need their name, address, or any other information to generate estimates about the site's success, just the fact that they did visit and appeared to like what they obtained.)

Our data indicates the Internet is one of the highest return on investments for advertising.

Our data and other industry data indicates that the return on investment for Internet advertising is higher than most other media. Further, when combined with other efforts, when an Internet portion for the effort is available, the results of the combined effort is much higher than any single effort.

Newspaper and magazines results. The results for this varies dramatically. First, was the newspaper or magazine the type of publication that your customer tends to use? If not, a $10,000 ad will fail to produce even one single order. Second, how many times did it display? People may remember the ad from yesterday's paper and go back to today's paper to see it. If it is not there, they probably have already discarded the original paper in which they saw it. Thus the beneficial effects of the ad may be lost. Our experience with newspaper and magazine ads are that a single display is unlikely to produce ANY result. A customer that ran a display ad in a major paper with a circulation of 300,000 got only three responses and no sales. Another got three sold responses. The second groups' ad cost was $300 and the product sold was $20 each. The result was a $240 loss. When the second group ran multiple ads every Friday (signing a one year contract), they got a better rate ($100). The number of responses increased to six. Result, a return on investment factor of 1.2 ($1.20 returned for every dollar invested or 20-percent).

Television and radio.  These are relatively expensive media for advertisements. Unless the firm has a solid customer base to support the cost of this media, it is usually priced out of most businesses' reach. For a single ad event, it is less effective than printed media. After all, once the voice and/or image has faded, all the person has is their memory of the event. This is why you get such abusive commercials that scream the phone number over and over again... they are trying to get you to remember it. The businesses OfficeOnWeb serves are small to medium sized businesses. None have been able to support an extended television or radio campaign. All their limited campaigns have failed to return anything close to the investment costs. A live radio broadcast feed from a restaurant was the closest to generating a return for a customer.

Yellow pages. The return on investment for this depends mainly on size of the ad versus the size of the competition's advertisement. Check out the section for lawyers. In our area, most attorney Yellow Page ads are full page ads. Thus, if attorneys in our area want to advertise in the Yellow Pages and don't want to invest in a full page ad at nearly $3,000 per month-- forget it, it won't pay off. Our data for Yellow Page advertisements indicates that these tend to return their investment only. (They do have their purpose. We have several large Yellow Page ads ourselves.) The effectiveness of the return on investment depends heavily on the product being sold. If it is large and expensive motor homes, one sale generated by the Yellow Page ad could pay for the entire ad. In this situation, two can generate a return on investment of 2:1 and so on.

Internet.  It is very inexpensive to advertise on the Internet. It is probably the cheapest way to tell people about your business (excluding the hated spam e-mail messages). The biggest problem most people have is poor selection of hosting location and amateur design of site. The advent of the easy to use HTML editors with many their features has heightened this problem dramatically. More than 80-percent of all web sites fail to return the investment made in them. This is a terrifying thought when you consider that most are designed by the owners and the only investment being discussed was the hosting fee and a piece of software. (This has the erroneous presumption that the owner's time is free. This is not a good assumption since the owner could have been involved in other more profitable endeavors that they were more comfortable doing.)

Surprisingly, this is actually a better rate than many other media. Interestingly, industry data indicates that a professionally designed page on a business hosting service has an 80-percent chance of producing a return greater than its investment. This demonstrates an important point. To achieve success, the web site owner should either invest in the cost and time for themselves or their staff to learn to become an expert, or hire that expertise from a professional group that specializes in producing successful sites. (This professional expertise is unlikely to be developed yet in the 15-year old nephew of a friend that likes to play with computers. See our discussion about "why to select a professional designer".) When a site is professionally designed and maintained, the average return on investment is often five times greater than performing the same type of advertisement on other media.

A web site costs between $312 to several thousand dollars to develop and place on the Internet for the full year. The average small business site costs about $2,000 for the first year. If the site were left unchanged, the continued cost for these sites would be from $162 to $486 per full year. However, unlike other media, a web site can be augmented with more information, easily corrected, and improved at will. Thus, while the second year would cost very little to continue the effort unchanged, most business that have a professionally designed site decide to increase and improve their web site. They have generated enough increased business that they decide to expend a comparable amount - as their first year, in the second and third years too. The repetition and increased magnitude of these sites attest to the effectiveness of Internet advertising for these firms.

The return on investment for an Internet web site is often $2 or more for every dollar invested. Some industries are not as mature on the Internet and produce higher returns. Others produce much less. Several businesses have attained return rates of $40 for every dollar invested. Some are even higher than this. However, it should be noted that it usually takes about six-months to begin to attain this rate of return.

Combining. Think a moment. Do you only hear of AT&T^TM, IBM^TM, or Nike^TM on the radio, television, or newspaper? No. You hear and see their ads everywhere. Billboards, radio, TV, newspapers, magazines, and more are always being used. They recognize that success in advertising is obtaining a full range of impressing your brand image on the customer. In this way, when they decide to buy, the name of the company already has stature and respectability to them. Sales people then use this impression to assist them. How many people have been told by an IBM salesperson that they should "Remember, the 'B' in IBM^TM stands for BUSINESS"?

When all efforts are combined and a web site address is included in other efforts, the effectiveness of the advertisement in those other efforts increases dramatically. In one recent situation, adding a web site address to a classified advertisement increased the classified ad's production by a factor of two. Further, web site traffic went up too. Thus, the advertiser could see that the printed ad was having the desired effect. Without the web site, they may have never known that the printed ad was producing the kind of positive result that they wanted.

A caution is prudent here though. Web site addresses directly tied to a newspaper or other group are noted for a lack of production for the web site. (The reason for this is, in our opinion, that the web site is not truly marketed throughout all other media. It has become just a part of the newspaper, phone company, or other group and retains that same level of effectiveness. More effectiveness, not the same level, can be attained through separation of these efforts. Further, a newspaper may do very well in the newspaper business and not be very expert in the Internet business. We have customers that have been approached by some of these groups that are selling web services, and the salespersons have never been on the Internet themselves.)

Our data indicates that when you include your independent web site address in your newspaper, yellow page or other ad, you can expect the effectiveness of that ad to increase by 20-percent or more. We expect this trend to increase dramatically. A web site address is becoming as necessary to a business as their phone number. In April 1998, a survey indicated that 15-percent of industrially based businesses had a web site. This was up from about 8-percent the year before. In a recent newspaper article suggesting places for travelers to visit, more than 80-percent of those mentioned had a web site address. This seems to imply that those that did not have a web site address were at a serious disadvantage in obtaining press attention. This could create a serious loss for a business. After all, obtaining a single favorable newspaper review can increase business for a full week by a factor of more than 10. [more]

The effect of supporting existing customers on advertising and some general advice

For many firms, in the beginning the purpose behind their installing a web site was to support existing customers, reduce the cost associated with that support, and increase the availability of that support. This level of support for the existing customer generated increased interest in the firm. People like the fact that they can get free support from the firm through their web site. Further, they become more comfortable with the firm and its products and services. As a result, the concept of using the web as an advertising media was born.

However, if you think of your web site as only an advertisement, the effectiveness of the web site as an advertisement will be noticeably reduced. Use your web site to tell your customers news and facts they can use. Unless you are an entertainment company, don't make the mistake of trying to be the most entertaining site on the web. The investment costs to do this are high - and it is not your principal business. Use humor in your field or product area and don't compete with MGM^TM. Entertainment is their business and they have the resources to do it well. You cannot compete with that kind of capability. So, stick with what your business knows best.

OfficeOnWeb is your full serve business hosting service.