OK, so as a small business, you’ve come to the conclusion that you need or want to advertise your company or your products and services. Hopefully, you’ve done your due diligence and considered whether or not advertising is for you – and you’ve decided that indeed it can boost your business. The problem all businesses face now is: What ads should I buy? The options can seem dizzying in many ways:
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- Social media ads
- Search ads (local, national, worldwide)
- Display, text, and native ads
- YouTube or other video platform streaming services
- Mobile-app ads
- Text (SMS) ads
- Programmatic-only ads (display, native ads, video ads) that run on connected TV/OTT (mobile) devices
- Digital out of home (DOOH, e.g., the ads that show up at your local gas station pump or on the trivia machine at the bar)
- Television (linear TV)
- Radio & Audio (e.g., Spotify or podcasting ads)
- Newspaper & print (yes, it still exists)
- Outdoor advertising (billboards, bus stops, buses, taxis)
- Direct mail
- Event sponsorship (in-person, online)
- Directory sponsorships
- Email advertising (sponsored content) & chaperoned emails
- Influencer/word-of-mouth advertising
Because you can’t do all of them (or even many of them) as a small business, you have to whittle down what you’d like to do to maybe one or two choices. And then you have to learn the capabilities or nuances of different advertising platforms to get the most out of it. How do you do that? We recommend walking through a decision-making process in the following way. At the end, we’ll provide some guidelines for using each of the above ad types based on the considerations we list:
Consideration No. 1: Your Budget and Resources
Advertising is going to require you to spend money on media – that is, a placement somewhere visible where your targeted audiences can see your brand, and/or products and services. You might also have to spend on an agency that helps you place the ad (whether that’s through a publisher or ad platform, a billboard, or wherever your campaign is running). And many placements will also require you or your agency to produce some sort of creative (images, video, audio, text) that call attention to the ad itself. The more money you have, the more options available to you.
In general, video advertising (YouTube, TV, digital out of home, linear TV, connected TV, some social ads) will tend to be the most resource-intensive because it requires a video that you have to produce. That doesn’t mean a company with limited resources should rule these out (as there are ways to produce inexpensive video) but we would make sure if you’re going to go down this particular road, you have the means to produce a quality creative. The same goes for audio or radio ads, or display ads that require a design of some kind. For those on a limited budget, it might be that social ads (which tend to be less expensive – especially Facebook – could work better for you to start because you can reach a large number of people for a smaller cost.) That said, see consideration no. 3 below – the type of business you have.
Consideration No. 2: What’s Your Time Horizon and Funnel-Targeting Approach?
Ask any small business what they want out of advertising and probably 99.99% would answer more sales or revenue. But the question is really when. In other words, when does your time horizon allow for gaining those sales? If your answer is: “Immediately,” then you’ll want to understand what ads will help drive that conversion directly from the ad itself. The problem: In most cases, that’s now how advertising actually works. One thing to remember about advertising is that it takes anywhere from 8 to 14 “touchpoints” for someone to even consider your product or service. That’s a lot of dollars focused on individuals who aren’t hitting the “buy now,” “register” or “sign up” button. In other words, advertising, in general, is more effective making people aware of your brand (at the top of the marketing funnel), which can later lead to behavior of them searching for your products and services or going to your website, but perhaps not from the ad itself. The one exception to this: those individuals who are looking for a solution now or those purchases that happen on an impulse basis. For this, we’ll outline some ways below that you can take advantage of this, including paid search, direct mail, or other options.
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- Reality Check No. 1: Are people searching for your business or your type of solution right now? If they are, great. You can easily (or have agency like ours) place ads for you in Google search that appear when people are searching for particular solutions or even your brand. You can also remarket to them in various digital platforms. In this case, we would strongly recommend that you consider the offer: Are you providing a discount, an easily accessible number to call? What’s going to put them over the top in terms of a decision?
But what if they’re not searching for a solution or know what they’re looking for? We’ve seen this happen in particular when a company has a new or different product, or they’re selling something which isn’t yet established. You can certainly use paid search to brand your company and start driving traffic to related keywords, but it may be better to consider other brand-building or demand-creation type spots that might help drive more touchpoints and awareness.
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- Reality Check No. 2: Are you able to actually target the people you want? Hopefully, you’ve defined your audience and can target them with any number of the platforms that you need. But not all platforms have access to the same data and not all of them can target as granularly as you might need. To give an example, we recently engaged an Asian-American group that only wanted to target Asian-Americans. But many of the social platforms don’t provide that type of targeting based on ethnicity[1], so we had to do a workaround: Targeting the lookalikes of people that followed their existing social accounts and remarketing those who had visited the website. We also looked elsewhere to programmatic ad platforms, which did have that targeting. In another example, we had a client that wanted to target only longevity doctors, not for example, those who are in other medical disciplines. That can get tricky too (in any of the above platforms) unless you have access to a confirmed list of individuals.
- Reality Check No. 3: What’s the user behavior I’m looking for? We referenced this above, but upon seeing, hearing, watching, reading or opening your ad, what do you want your audience to do? If you think about how the average person consumes any advertising whether that’s digital, radio, television, print, or that which comes in the mail, you’ll see different behavior in each. It might be you do get people to respond directly to an ad, but more likely (unless it’s an impulse-purchase or they are in market now), it helps to think about what actual user behavior will be. The most common? Individuals will see an ad in one medium (maybe it’s a billboard or bus stop, on a website, or even a radio ad) and then they will later search for that brand as it’s now top of mind. That means the ad itself was effective, but may not have driven direct conversions.
Consideration No. 3: What Type of Business Are You? Where Are Your Potential Customers?
Do you sell your services direct to consumers (B2C)? Or do you sell to other businesses (B2B)? Do you have a retail store (either in-person or online) or do you have a sales-based business where your marketing has to drive leads? Do you focus on a local market? National? Worldwide? Each one of these questions will dictate where and on what platforms you place your ads with. The other question: How visual is the product or service I’m selling? For example, let’s say I have an online-only jewelry business that sells direct to customers nationwide with a modest budget (under $3,000/month on media). I do have visuals and video that I can produce for an ad. In this case, I probably want to showcase the beauty of the jewelry, so I might choose the following mediums that would allow me to do that or take advantage of the visual nature of my product somehow:
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- Social media
- YouTube and video platforms
- Programmatic display, connected TV/OTT
- Influencer marketing (have the influencer wear my jewelry)
At that budget level and targeting, I probably don’t need:
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- Hyperlocal targeting (as I’m nationwide), so no bus or outdoor display advertising
- Google search (which will be likely more competitive) and not as compelling visually, though I might consider Google Shopping).
- Linear television (probably a bit beyond my budget unless I’m specifically targeting just a local area.)
- Audio or radio (doesn’t showcase the visual nature of my product)
- Direct mail (It may be too expensive per piece to send out and there are likely other more affordable options.)
- Newspaper or print (expensive, very local, not very visual per se)
- Event sponsorship (unlikely unless it’s a trade industry event with potential buyers)
- Directory sponsorship
- Email sponsored content or chaperoned emails (again, unlikely)
Consideration No. 4: Will I Provide an Offer to the Customer?
Some mediums are better suited to offers than others. For example, if you plan on advertising a 25 percent discount, certain mediums are much more suited to offer redemption. Among them:
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- Social media
- Google search ads
- Direct mail
- Programmatic display ads
- Mobile app ads/text ads
- Influencer ads
Obviously, if you’re going to offer a download or some other content as part of your offer in the ad, then a digital format will likely be a lot more useful than anything offline, as audiences will be able to download something directly as well.
Conclusion: Going Through Each Ad Type
So, based on the considerations we lay out above, let’s go through the different ad types and what they generally work for. Note: This only a guideline for you, and certainly isn’t a hard and fast rule. Much will depend on the unique situation of your business. But let’s outline a few things below:
Social Media Ads
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- Budget & Resources: Good for all budgets and resource levels, as you can boost content for very little per month, say $75, and get a return). For most “advertising” on social, however, it may require at least $500/mo. spend on media or more.
- Time Horizon/Funnel Approach: Generally best for top-of-the-funnel or a mid-funnel focus (especially for content downloads for B2B businesses). Not great for direct/immediate conversion but best for a longer-term branding opportunity.
- Business Type: Most success will come from B2C rather than B2B. LinkedIn might the exception. Great for retail, but can be used for B2B downloads.
- Using Offers? Yes, a good medium for offers or content downloads.
Search Ads (local, national, worldwide)
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- Budget & Resources: Best for companies who have at least $1,000/mo. to spend on media alone.
- Time Horizon/Funnel Approach: Great for lower-funnel marketing and conversions (assuming you can target those searching for a solution right now). It can also work as a branding mechanism as well. And is often used at the mid-funnel for acquisition through content downloads.
- Business Type: Works for most business types, B2B or B2C, assuming they take the right funnel approach.
- Using Offers? Yes, a good medium for offers or content downloads.
Display, Text, and Native Ads
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- Budget & Resources: Best for companies who have at least $1,000 / mo. to spend on media.
- Time Horizon/Funnel Approach: Companies that advertise here will generally have a longer-term horizon (top-of-the-funnel marketing) and shouldn’t expect immediate conversion from ads.
- Business Type: B2C companies tend to have the best results. For B2B companies, it really depends on the business type but there are probably better options out there than this for most B2B small businesses.
- Using Offers? It’s OK for offers but there are better mediums.
YouTube Ads or Other Video Platform Streaming Services
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- Budget & Resources: Best for companies who have at least $1,000 / mo. to spend on media.
- Time Horizon/Funnel Approach: Generally, the goal is top-of-the-funnel to mid-funnel marketing, where video can be used to make people aware of products and services in B2C or acquire new prospects in B2B.
- Business Type: Video can work for all business types, B2B or B2C, retail/e-commerce or sales-based.
- Using Offers? Video can be used to promote offers and discounts especially for conference registrations or limited-time offers. It also works great for free content download offers behind a registration.
Mobile-App Ads
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- Budget & Resources: Similar to the other options, it pays to have a larger budget if you’re going to target mobile-only users, especially through in-app advertising. We would recommend at least $1,000 / mo. on media spend if not more.
- Time Horizon/Funnel Approach: Like the other forms of advertising above, the goal is generally awareness though you can target mid-funnel approaches here, especially on the phone. For example, if you have your own mobile app, you can target app downloads or other activity. But those are generally isolated cases for most small businesses.
- Business Type: The companies that advertise on mobile apps are “generally” B2C. That’s not saying B2B companies can’t advertise if their audience is found there, but we would lean away unless you have a specific audience type that you’re targeting with ads.
- Using Offers? Certainly, if you have a B2C company, offers work great here. For B2B companies, you can try content download offers, but there are probably better avenues to get results.
Text (SMS) Ads
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- Budget & Resources: Typically, SMS marketing messages to prospects (who are not on your current acquired list) cost about 1 cent to 5 cents per message. That’s not a ton of money, but it can quickly add up if you want to send to tens of thousands of individuals.
- Time Horizon/Funnel Approach: Generally, companies that engage with send Text (SMS) ads are looking lower-funnel (an immediate-term conversion) from the ad itself.
- Business Type: Again, we would suggest that the majority of uses come from B2C companies, retailers, or other that sell directly to a customer. It’s not unheard for B2B companies to use text ads but it’s more rare.
- Using Offers? Generally, good SMS marketing campaigns have a very clear and measurable call-to-action with businesses aiming for sign-ups, registrations, coupon redemptions, etc. So, it’s actually critical to have a great offer of some kind here. Also, a limited-time one doesn’t hurt either to create urgency.
Programmatic-Only Ads (display, native ads, video ads) that run on connected TV/OTT (mobile) devices
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- Budget & Resources: Many businesses don’t realize you can run programmatic ads for a little as $500 per month in media spend but it’s generally recommended to do at least $1,000 per month. The one catch for small businesses: Most programmatic platforms require agencies like ours to run the ads on behalf of a small business.
- Time Horizon/Funnel Approach: Like other forms of display, native, video ads, the approach is generally taking a longer-term horizon/view, aiming at top-of-the-funnel awareness for your brand, products, or services.
- Business Type: Programmatic ads can work for B2B or B2C, retail, or sales-based but emphasis here is on the time-horizon. If your business needs very specific targeting, this may be a solution to look into, as the data shared across the platform tends to be very granular.
- Using Offers? Offers can certainly work for retail or direct-to-consumer programmatic ads, but as mentioned, most of the focus should be on awareness and brand.
Digital Out of Home (DOOH, e.g., the ads that show up at your local gas station or on the trivia machine at the bar, or digital billboards)
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- Budget & Resources: Generally, these ads haven’t been traditionally very accessible for the smallest of small businesses as they more commonly fall in the realm of advertisers who have bigger budgets. The hyper-local-targeting capabilities can mean higher CPMs (cost per thousand of impressions) but much depends on the market, where CPMs can fall to $1 to $5. Generally, we’d suggest small businesses be prepared to spend at least $10,000 per month.
- Time Horizon/Funnel Approach: Because these are essentially billboards, the time horizon is much longer term and the focus is on top-of-the-funnel awareness.
- Business Type: DOOH is great for local businesses or businesses who have specific targeting needs in local areas as the data from mobile devices – often the primary targeting mechanism— is very, very granular.
- Using Offers? DOOH can be used for offers, but it’s generally not the best medium for it, as such offers can’t be immediately redeemed through the platforms the ad is being displayed on.
Television (linear TV)
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- Budget & Resources: Much depends here on whether you’re aiming for local or national TV. Local TV can be affordable with CPMs ranging from $5 to $10. National TV spots will run much higher averaging $115,000 per spot. Either way, if you end up gong the linear TV route, be prepared to spend at least $10,000/mo. for even a local ad to get the market penetration you’d ideally want.
- Time Horizon/Funnel Approach: Television ads by definition are top-of-the-funnel awareness purchases. Depending on the product, you may convert quickly if catch the right audience at the right time, but it’s generally safer to not go in with illusions of immediate-term rewards.
- Business Type: Local businesses, retailers, restaurants or local businesses who provide direct-to-consumer goods or services can take advantage of this. Generally, if you’re a smaller B2B company, linear TV may not be not the best option, but much depends on the industry you’re in.
- Using Offers? Television ads can certainly convey offers (think car dealer sales on holidays as an example) but in today’s day and age there can be more cost-effective ways if you want to go the offer route.
Radio, Audio (e.g., Spotify or podcasting ads)
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- Budget & Resources: Radio ads vary in cost, but businesses can spend anywhere ranging from $250 to $5,000 per week. With radio, you pay per spot that you appear, so if you have an ad you want to run and it costs $10 per spot and you want it to run 5 x per day for 5 days, it will cost $250. As for Spotify, you can launch a campaign for as little as $250. The average CPM runs between $15 and $25. So, if you spent $250, you could expect between 10,000 and 16,667 impressions. Podcast advertising will similarly vary, depending on the show and target you end up on. One thing to check: To save on the cost of creating an ad with a voice talent, sometimes stations will provide that service at no cost, assuming a standard run.
- Time Horizon/Funnel Approach: Similar to television, companies should consider radio ads to be longer-term in terms of horizon and focus on top-of-the-funnel awareness.
- Business Type: All types of businesses advertise with audio, though, generally it remains the realm of B2C companies who sell more directly to consumers. B2B companies can certainly use it for branding opportunities but there are also better options for business-to-business companies.
- Using Offers? Radio and audio ads are similar to television in that they’re probably best suited for top-of-the-funnel awareness marketing. Offers can certainly be done in the right context but you’re making someone remember both the brand and the offer, which is not an easy thing to do unless you can get them to act right away.
Newspaper & Print
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- Budget & Resources: Newspaper ads can cost anywhere from $50 for a small modular spot to $2,500 up to $150K or more for a larger placement. For example, a local paper might charge $12 per inch for a black and white ad, so a 4×10-inch ad would cost $480. Full-page ads can be quite expensive ranging anywhere from $50,000 to $150,000 – the latter cost at a national paper such as USA Today or the New York Times.
- Time Horizon/Funnel Approach: Newspaper ads, similarly, are not necessarily about taking action on the ad, as much as they are focused on top-of-the-funnel awareness and branding.
- Business Type: All sorts of businesses advertise in local papers. Depending on the industry, even some B2B companies will use it occasionally, though much of the activity remains business to consumer.
- Using Offers? It can work. But because it’s generally top-of-the-funnel as a focus, there are a lot of better ways than print advertising to advertise a particular offer these days.
Outdoor Advertising (billboards, bus stops, buses, taxis)
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- Budget & Resources: Let’s start with advertising on, say, a bus. The minimum price for advertising on the side of bus can run anywhere from $10,000 to $15,000 per month in some of the major cities of the U.S. That will allow 100+ buses to carry around your message. Note: The back of the bus is less expensive than the sides, as impressions are limited in the back. The cost of bus shelters can run anywhere from $1,000 to $4,000 per month depending on the city. Large billboard costs will depend on the location but can run anywhere as cheaply as $750 per month to more than $15,000 per month.
- Time Horizon/Funnel Approach: The general approach for most advertisers is more of a top-of-the-funnel type focus. However, consider some billboard advertising for retailers, restaurants and shops along the road. Those get you to stop, don’t they? Much depends a businesses’ proximity (where the business located versus where the ad is run.)
- Business Type: You can certainly consider this as a B2C company if you have a need to brand your presence in a particular local area or you are simply local. For B2B companies, we’d generally suggest there are other, better opportunities elsewhere.
- Using Offers? Offers can work in certain contexts, but it’s not a medium where people can often redeem that offer immediately.
Direct Mail
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- Budget & Resources: When it comes to direct mail, there are several costs small businesses need to consider. First, the cost to rent a list (typical behavior):
- Paying to buy or rent additional lists beyond your house list
- $10 – $20 per thousand names for saturation lists
- $50 – $100 per thousand for consumer names
- $80 – $160 and up for business lists
- Paying for the design, printing and production costs, including the type of paper stock and finish you want.
- Paying to send the mail (including packaging and postage. One tip: Postage can cost up to 40 percent of the total for your direct mail. So, make sure your mailings can be processed by machine, rather than by hand, as the cost differential can be significant.
- Paying for any ad retargeting follow-ups
- Paying to buy or rent additional lists beyond your house list
- Budget & Resources: When it comes to direct mail, there are several costs small businesses need to consider. First, the cost to rent a list (typical behavior):
In general, we’d recommend planning to spend anywhere from $7,500 to upwards of $15,000 or more on any given mailing.
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- Time Horizon/Funnel Approach: Many small business advertisers are focused here on the lower-funnel because the direct mails themselves may have offers, discounts or other language where actions are tracked to particular discount redemptions. And because the customers who open them have the mail in their hands, it’s ideal for those who do business by phone or can be reached in-person or online.
- Business Type: All types of business use direct mail, both B2B and B2C.
- Using Offers? Yes, this format is especially good for offers because individuals who open the mail have the offer printed in their hand and can typically redeem it online, over the phone, or in person.
Event Sponsorship (in-person, online)
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- Budget & Resources: The cost of sponsoring an in-person event will depend on the type of event it is (industry, audience), the size, and the sponsorship you choose. Typically, a small booth at an event with roughly 500 attendees can run anywhere from $2,000 to $5,000 or more. Larger showcase spaces can run in the tens of thousands of dollars. Larger sponsorships will often include recognition at the event and an email that goes out to attendees with your brand logo included. Online event sponsorship works similarly, though, tend not to be as costly as in-person.
- Time Horizon/Funnel Approach: Companies that sponsor events are aiming at the mid-funnel, attempting to scan badges, collect business cards or acquire marketing qualified leads.
- Business Type: There are some B2C companies that will sponsor an event, depending on the industry and the audience, but the overwhelming majority of event sponsors are typically B2B.
- Using Offers? While some companies may provide incentives while at an event, it’s typically focused on an acquisition of names/connecting with potential customers. Hence, offers aren’t usually employed in this context.
Directory Sponsorships
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- Budget & Resources: An association, business directory, or local chamber of commerce, might offer advertising to its audiences. The cost of an ad here will depend on placement type and the directly but expect to spend anywhere from $250 per month to $5,000 per month for an ad with a directory of some kind.
- Time Horizon/Funnel Approach: Audiences in this case are generally pretty targeted to a sponsoring company’s products and services because they are based on the association or directory category, or a particular local area. Nonetheless, that doesn’t mean that everyone is “in market” for those services at the moment. So, must advertisers here will focus on top-of-the-funnel engagement and awareness.
- Business Type: This one area that fits both B2B and B2C companies but the appropriateness of buying an ad will depend on the industry and business type.
- Using Offers? Generally directory sponsorships don’t highlight offers as they are focused more on top-of-the-funnel type awareness. Certainly, in the right context (usually local directories), it can be done where a company promotes an offer to a specific directory’s audience. But there are also better opportunities to execute offers as well.
Email Advertising (sponsored content) & chaperoned emails
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- Budget & Resources: Much of the cost here will depend on the type of email (usually a newsletter), the industry, the subscription/circulation level, and the specific audience. In the B2B world, where newsletter sponsorships are most common, the higher the title of the target audience, the more expensive the cost. Typically, sponsorship involves a content placement in the newsletter with links back to a sponsor’s website. Such placements can cost anywhere from $2,000 to $7,500 or more depending on the audience and industry. Chaperoned emails (which a publisher will send on behalf of an advertiser to its audience) will often run $7,500 or more depending again on the audience size, makeup and distribution.
- Time Horizon/Funnel Approach: Contrary to what many believe, sponsored or chaperoned emails are actually more effective for top-of-the-funnel awareness goals and mid-funnel engagement rather than any conversion. That’s because, contrary to regular emails where the audience typically knows the company (having already been acquired to its list), a sponsored or chaperoned email is more of a cold introduction. Hence, if you do decide to move down this path, don’t expect conversions automatically and plan for a much longer time horizon to convert.
- Business Type: Generally, this remains the realm of B2B companies rather than B2C. There certainly are exceptions here and there, but if you’re a small B2C company, there probably isn’t much here for you.
- Using Offers? Generally, with a top-of-the-funnel approach, offers are rarely used here. Can there be exceptions? Of course. But recipients in this case are often just getting to know the company and what they do first. Best practice would be to look at a sponsored or chaperoned email as an introduction.
Influencer/Word-of-Mouth Advertising
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- Budget & Resources: The cost of influencers will literally vary wildly depending on who they are, what industry you’re in, and what product/service you’re selling. Most of the activity by the influencer is focused in social. Some can be a low as $200 per post for say, a temporary Instagram Story, to tens of thousands or hundreds of thousands of dollars depending on who you’ve chosen.
- Time Horizon/Funnel Approach: What you’re typically aiming at here is exposure to the influencer’s audience so basically a top-of-the-funnel marketing approach. Sometimes, if you’re in retail or other areas where the purchases are more impulse-based that can translate into immediate sales. But much of that is based on what you sell.
- Business Type: Influencers are predominantly found in B2C, retail, or e-commerce-based businesses. While there are “influencers” in B2B industries, they tend to work a bit differently, often without necessarily needing payment but looking at other forms of compensations such as free products.
- Using Offers? In the right circumstances (detailed above), offers to an influencer’s followers can work really well. It benefits both the influencer (as it means they have sway with companies) and it often can benefit companies in that those customers who follow the influencer get to try products and services at a discount.
We hope this has been helpful. If you need help with any type of paid media or advertising, let us know. We’re happy to schedule a free consultation based on your needs.
[1] Many also don’t allow direct targeting based on political affiliations, political causes (climate change, gun rights etc.)