The advertising itself is an investment. But, small businesses don’t see it that way. They have a fear that they might waste money and as a result they might miss out a great opportunity. However, advertising is the quickest way to propel the business.
In online, it can measure the entire sales funnel and can see where the customers came from. So, if you can easily determine the effectiveness of the advertising, then, you need to figure out these two important advertising metrics, for you to know how you can come up with an online advertising budget and profitably buy new customers.
In the internet, it provides a great platform for low-cost, high-yield marketing and advertising. So, here are the two metrics that you need to figure out:
- Customer’s lifetime value
- You need to determine what the customer lifetime value is. This number depends on what type is the business. But mostly, the people know that it is far easier to keep an existing customer than to search for a new one. So, to figure out if the customer is worth over the average life of their purchasing, then it’ll be a surprised. But, sometimes an easier the metric to find is the most cost one purchase the advertising.
- Cost to acquire each customer
- Figuring out how much it will cost to acquire each customer. So, when you know how much customers worth, then figure out how much you afford to advertise and still make a profit. When measuring, tracking and reporting customer acquisition, it will need to focus on several metric. Initially, you’ll want to know the average cost-per-click (CPC), and if that number is optimized or static, then you also want to track down your total cost-per-click for a given period of time. Now, focus on the conversion and the total conversion cost. And, you can use a simple tool to quickly run a few scenarios and determine the advertising if it is profitable before spending a dime or not.
Advertising also is a critical part of a promotion plan, and it’s one of the fastest ways to build a buzz and generate leads or sales. But, there’s no one that fits all model. And you can’t just throw money around. Large businesses can use every type of advertising because they have the capital to back it up, but in small businesses it needs to figure out what type of advertising is right for their team.
So, here’s a lists of two effective types of online advertising business that you should be using:
- Brand advertising
- This advertising focuses strongly on the display of the brand, logo and message. In offline, it includes the TV advertisement, radio spots and billboards. In online, it mostly the banner ads and other forms of integrated advertisements. The main metric that you’re going to use is cost per thousand customers. So, it means you want to know both the total reach, and unique impressions to determine the costs/benefit. Display advertising is usually difficult to track and measure directly, but nonetheless, it’s powerful.
- Direct Response Advertising
- This one is elicit a direct response from the customer. The best example for this is Google AdWords. So, when using PPC type of advertising, it’ll need to be paid based on each action of the customer that takes with the advertisement. This is a lot easier to measure direct results. It will send the paid traffic to landing pages with Opt-in forms or sales pages. It would then measure the conversion rates to determine the advertising if the cost is effective.
Therefore, advertising is an integral part of your marketing strategy, and it’s the best way to reach people and get the quickest results.