Organic vs. Paid Marketing (Part Two)

Forward View doesn’t always recommend digital advertising (paid marketing) to our clients because small businesses are always budget-constrained. Despite the drawbacks of paid marketing, it's still important to understand the options.

Several years ago, digital advertising was limited to deciding which websites should carry your ads and exactly how large the ads should be. Those days are long gone. Today, companies have several more opportunities to communicate their messages online. The best advertising strategies utilize multiple forms of digital media to reach potential customers. Let's look at some of the most popular advertising tools:

  • Traditional Banner Ads. Pros: Banner ads typically frame content, such as news articles, and don't annoy the public. They're an old standby of digital marketing. Cons: According to digital advertising expert Muriel MacDonald, "Modern day banner ads have a click rate of less than .1% (or 1 in 1000 people) which means you are more likely to complete NAVY SEAL training than click a banner ad. What’s worse, a small percentage of internet users (about 8%) do 85% of that clicking – and those humans (or bots) probably aren’t the high quality traffic you’re looking for." People have been exposed to these ads for so long that they're rather ineffective.

  • Video Ads. Pros: Videos are more engaging and difficult to ignore, especially if they run before something like a music video that people want to see. Great video ads remain effective online and are more likely to be attentively viewed than banner ads. Cons: Videos are relatively expensive to produce and display. You're not going to take a $500 digital advertising budget and successfully create a video ad. A low-quality video will also hurt your brand! Advertise carefully.

  • Search Engine Ads. Pros: We've found that search engine ads are good for brand awareness. If you're looking for an efficient way to introduce your business to the people, paying for ads connected to specific search terms can be highly effective. Cons: While search engines can flood your website with traffic, you'll need to do much more to convert visitors into customers. Your website must be well-designed or you'll lose everybody. In addition, search engines might not allow you to segment your target market perfectly.

  • Social Media Ads. Pros: Have you ever been browsing Facebook, LinkedIn or Twitter and found a post/tweet in your feed from a business you never liked/followed? That post/tweet is just an ad. Companies pay to sponsor/promote content because, thus far, most people find such advertising less obtrusive than other ads. Sponsored content is honestly a hybrid between digital advertising and organic marketing. These posts are also mobile-friendly. Cons: Over time, people may become habituated to promoted content, too. Social media platforms can also rise and fall in popularity quickly. Don't get complacent!

This newsletter is hardly an exhaustive analysis of digital advertising, but we hope you'll at least appreciate the overview. Please contact us today to discuss how to promote your business online. Next month, we'll review organic marketing!

Nathan Yates

Nathan Yates has been fascinated by technology and finance since he was young. He was the kid devouring the business section of the newspaper (remember those?) while others read everything else. Nathan believes that the American economy is built from the bottom-up, meaning that small businesses and local nonprofits are the foundation of our nation's success. These organizations are the lifeblood of towns and cities across the U.S. Unfortunately, most consulting firms overlook companies or organizations that don't have eight-figure budgets. Nathan thought Forward View Consulting should be different. And we are. As Lead Consultant, Nathan works with each client to deliver only the best financial and/or website development services. Nathan's years of web design experience and his business degrees ensure that professional expertise is brought to each project. Our network of contacts can offer additional specialized guidance if needed. Before creating Forward View Consulting, Nathan worked for an independent equity research firm as a Research Associate covering the industrial and energy sectors. This work involved preparing quarterly 15-40 page reports on multi-billion dollar corporations along with timely analysis of M&A activity and industry-wide news. He also managed research distribution and the company's online presence. Nathan also spent a summer serving as a local financial adviser's Research Intern. Nathan earned a Bachelor's degree in Economics and Finance from Southern New Hampshire University, graduating summa cum laude. He then earned a Master's degree in Finance from Southern New Hampshire University, where he was named the Outstanding Student in his particular concentration. Now, Nathan is an adjunct professor teaching economics and finance for his alma mater. In his spare time, Nathan enjoys fishing, reading, time with family and serving as a volunteer webmaster for the Clintwood United Methodist Church.