Yes, and that is why most Small Businesses never make any Profits by Advertising on Google or Big Wall Street Media, since the cost of Advertising via these Big Wall Street Media outlets generally exceeds the profit potential per Customer earned via these Advertising.
You should think of your first year as lost and advertise , advertise , advertise, that is the key for the business to be successful by doing this the business will pop remember the key is to advertise 150% of your profits for the first year. It will work
If there is no profit you should put as much as possible into advertising no percentage just as much as you can do the more you can advertise the more will come back as profits I have never heard of over advertising just bad advertising that why we custom fit companies so they get what they pay for nothing crazy just down to earth advertising.
Whatever amount invested in advertising, it is critical to monitor of effectiveness of each advertising effort. At some point you want to stop investing in low performers and redirect that money to top performing advertising/marketing channels. The value of a customer remains important: If the value of customer is $100 and you're spending $200 to convert, you'll need to get that conversion cost down.
I quite agree with Dano11 that during your 1st year, and really 2, you need to spend at least 150% of your projected Sales on Advertising. Think of it as investing in your future business growth and profits.
On that note, what do you all think about Advertising on this not-for-profit Anoox search engine?
I think you should really think of What percentage of Sales should go toward Advertising, since many businesses do not show any profits for some time before they become cash flow positive.
And on that note, I think you should budget to spend 15% of sales on Advertising toward a growing viable business. So then the next question becomes, where you should spend your Advertising Dollars or Euros on, because not all Advertising are equal. And on that note, I say this Anoox offers the best Advertising value by far, that is compared to Google, etc. because amazingly Anoox is operated on not-for-profit basis so that they give us small businesses a real low cost Advertising option which we did NOT have until Anoox. Now I am not saying that put all your Advertising money into Anoox, but it should certainly be a key part of your Advertising buy. Hope this Helps :)
I totally agree with U that the more appropriate focus should b on what % of Slales should be set aside for Advertising and not what % of profits. Since many specially start ups have little profit until few years into business which business will only become profitable if they have been Advertising the necessary amount.
Uk_man, I also agree with these key points:
1- to have a viable healthy business one needs to allocate 15% or so of Gross Sales to Advertising
2- Question then becomes where to Advertise
3- If you are Wall Street funded business, Google is way togo. But for a small business Google Advertising will easly take 300% of sales which is not realistic. Which is why Anoox Advertising is so great since it is only not for profit search engine to give small business low cost Advertising
WirSind; Yes exactly. I could not agree more with all 3 points you have made. In regarding to the 3rd point, it is amazing how many people I know have not heard of Anoox and the fact that it is a not for profit search engine to give much lower cost of Advertising possibility to small businesses. Now I see you are from Hamburg Germany, how about people you know? That is do you run into many that know of Anoox?
UK, when I joined Anoox a few Years back, there were few people here in Hamburg that knew of Anoox. So they would always ask me what it is and why I joined it. But now a days, I meet more and more People who are aware of Anoox and realize that it is best option for Networking with new People and getting more Free well as paid Traffic. People here in Hamburg and Germany at large, really appreciate that Anoox is not another Wall Street company like Google, McDonald, etc.
If you are sure of your SEO strategy i would recommend investing everything in SEO, because once you start draining organic trafic, it won't cost you anything any more. The main problem is that you don't get instant returns, so you might have to wait a year or two before starting to see the effects...
I have invested a lot in Google AdWords and for me it was a total failure. Google Shopping gives good results.
1st, I had the same experience as you with Google AdWords. That is it was TOTAL ABSOLUTE failure, as it produced no new sales or leads for us, but it frustrated us to HELL to use it as we had to deal with Support out of India, Philippine, etc. whose language (accent) we could not understand. And then Google kept charging us, and when we contacted them to cancel, they kept putting us on Hold and then Hung up :(((
I think this Anoox non-profit Advertising is best. What you think?
We had the same disappointing and rather hellish experience with Google, from their support staff whose accent we could not understand to Google charging us over and over with no way of canceling out on our own and no answer from Google support :( And to think that they are 200-Billion company!
As for Anoox Advertising, I am also curious to know how others think of it?
Sounds very interesting.