Does Online Display Advertising Actually Work for Small Businesses?

Many small business owners, and marketers they employ, often wonder, "Does online display advertising actually work?"

Many small business owners, and marketers they employ, often wonder, “Does online display advertising actually work?”

In a past life, prior to becoming a serial entrepreneur, I was at the forefront of strategic planning for Fortune 500 clients; overseeing global media budgets in excess of $25 million. So, I’m uniquely qualified to tell you, “Yes. Online display advertising does work.” But here’s the catch, the caveat — the disclaimer. There are specific reasons why it’s not working for you!

A fledgling marketer recently told me, “Online banner advertising doesn’t work.” I cringed. Then I realized, she isn’t alone. Many small business owners question the effectiveness of online advertising, in general, and thereby dismiss it when they hear of one company that couldn’t get it right.

But in lieu of theory let’s talk application.


Double Digit Growth Trajectories and Gym Class Heroes

You can’t ignore double digit growth trajectories. U.S. marketers spent $14.98 billion on Internet display ads last year, a 21.5% jump from $12.33 billion in 2011, according to research firm eMarketer Inc. And the research firm expects marketers this year to spend $17.70 billion on display ads, an 18.2% increase year over year. Simply put, you don’t invest ad budgets into channels that don’t yield results.

That being said, it is absolutely true that online display advertising does not work for you (i.e. no results). While I am not familiar with the scenario that led to your outcome I do know why online advertising has been the bane of your small business existence. Here’s a look at a familiar situation:

I’d wager that we both know people who go to the gym — irregularly. They sit, observe, do a couple of sets, and spectate as the body builder in the back throws up weights we could only imagine lifting.

As soon as a drop of sweat hits the floor, five minutes later, they are done. “Whew that was a tough workout!” they proudly exclaim. This continues for several weeks and they say to themselves, “I’m not seeing results. Working out just doesn’t work for me.”

However, if a certified trainer were to observe their training habits, most likely the trainer would attest to one simple fact: they’re doing it all wrong! But this person, fed up with no results, throws their hands in the air and says, “I’m done with the gym!” And then they proceed to tell others, “That gym thing didn’t really work for me — in fact, it doesn’t work at all.”

What’s wrong with this picture? They desired to be a gym class hero, but went about it in the wrong way. I liken this scenario to many discussions surrounding ill-fated attempts to harness the power of online display advertising.

You want it to work, but you’re going about it — all wrong.

So, today I’ll be your trainer and, if you’re ready, what I’m about to tell you will give your small business the online advertising workout of a lifetime.


Why Online Advertising Isn’t Working for Your Business

Online advertising has always been controversial. However, it’s no surprise that larger advertisers are throwing more money into online media. Interestingly enough, many small businesses aren’t reaping the benefits of this online party.

Couple increased global investments from larger companies and increased ad rates that follow; and the stage is set for increased competition, share of mind and limited, yet costly, ad inventory available for sale. Not to mention, online advertising — marketing in general — is a tough pill to swallow because there are so many moving pieces.

However, there’s good news! Every small business can make online display advertising work. If you commit to getting a few things right, you will position yourself for success.

Let’s take a revealing look at 11 reasons why online display advertising doesn’t work for you and how to fix it.

  1. You misunderstand the landscape.

    Online advertising does not limit itself to display (i.e. banner) ads. It includes different formats such as sponsorships, paid search, classifieds, rich media and the list goes on. Display advertising, the rectangular or square boxes you view on most websites, are merely a segment. For the purposes of this discussion, we’ll focus on display advertising.

  2. You lack advertising strategy.

    What is your online display advertising end game? Why do you want to purchase banner advertisements? Do you need to increase brand awareness — because no one knows who you are? Do you want to improve purchase intent? Do you need to support other direct response (DR) goals in mail, DRTV or telephone campaigns? Or do you need to drive website traffic? Gain clarity on why display advertising is an important component of your advertising strategy.

  3. Your metrics are flawed.

    Savvy marketers think beyond clicks; realizing they are merely a small part of the online engagement story. Studies show that, often, conversions (i.e. purchase, trial, registration, other marketing objectives) happen after an online user views an ad, but did not click on it. AdKnowledge research concludes that “advertisers that focus only on clicks or even post-click conversions may miss vitally important effects of their advertising campaigns.” Ultimately, you’ll need to assign the right metrics to support broader goals.


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