The entrepreneur's manifesto is always to do more with less. When it comes to advertising, traditional blunt marketing methods required ad agencies, artists and contracts, and involved lots of costly and time-consuming mistakes.
Now, the distributed power and focus of the Internet has blown up that model.
Take Google. The company's main source of revenue is the sale of searchable words and phrases to advertisers.
If you own a coffee shop in Kamloops, you might pick "coffee Kamloops," and pay for the right to display an ad against searches by Google users who type in those keywords.
Each time someone clicks through to your website from your ad, you pay Google. The costs of specific words and phrases vary with demand from advertisers – they'll bid up the prices of the ones that attract a lot of clicks.
Over time, you'll figure out which words attract the most clicks for your buck. You may be surprised by how cheap some effective words are – say, 50 cents per click-through.
Others could be unexpectedly popular and expensive, like "asbestosis." Lawyers might pay $20 or $30 per click for it, thinking that anyone searching might be dying from the disease, and may want to join a class-action lawsuit.
If you want to do more targeted and direct marketing, you should look at online social networking sites. Facebook and MySpace can be a great way to narrow your focus to only the most likely customers. I have many business friends who devote their entire ad budget to a combination of Google, Yahoo and Facebook.
Jordan Banks, the new head of Facebook Canada, told me that more than half of Canadians with disposable income are now Facebook users. You can set up separate Facebook pages for yourself, your cat and, yes, for your restaurant or dry-cleaning business. That allows you to add or reject any wannabe Facebook friends of your business, and you can blast out special offers to the entire group or to smaller ones within it.
Of course, distributing information online can also bite you in the ass. You can't stop those Facebook friends from commenting on your business, or other people from cheering or complaining about it on websites for product or service reviews. You have to stay on top of things by searching for postings on review sites, and responding fast to cranks.
I think the benefit of doing this outweighs the cost, because people are going to trash your business online, even if it has no online presence or strategy.
Because social media is both an information distribution and feedback mechanism, you can use it to create loyalty programs that would have cost you thousands in the pre-Internet days.
I thought about that recently when I was in Europe, and I was considering a visit to the tiny island of Herm, in the Channel Islands. You can walk from one side of Herm to the other in 10 minutes, and only about 60 people live there year-round.
The main source of income is tourism – enticing visitors to take the boat over from Guernsey, the largest nearby island. The locals have set up on Facebook (to create a community), Twitter (to provide instant updates), YouTube (for people who can't read), Flickr (to share photos) and TripAdvisor (for comments, good and bad).
When I checked the Herm Island page on Facebook, more than 4,000 people had joined it. Herm! Just three generators power the entire island, yet it has a potential worldwide following.
Or you may want to laser in on a few highly likely customers nearby. Suppose your restaurant is having a slow night, with no reservations after 9 o'clock. If you have regular customers who follow you on Twitter, offer them a time-based discount. It's different from e-mail in that you have no control over exactly who "listens" to your tweet right away, but the people who do will probably be very interested.
If you want to get more sophisticated, Skyhook Wireless has driven up and down practically every street in major cities in North America, Europe, Asia and Australia mapping the addresses for access points to WiFi networks.
Skyhook's technology can pinpoint the location of a customer who is sending out queries. That means you can buy ads served only to potential customers within a radius as small as you want, say, within one kilometre of your business.
One next step will be GPS-enabled mobile phones that will be able to accept time-based, location-based offers. If a jeans store in a mall has you listed as a repeat customer and you happen to be nearby, it'll be able to offer you on-the-spot coupons.
Are you shaking your head because you still don't get this stuff? Go to a high school, community college or university and ask if they have a business course that includes marketing. Speak to the teacher. Give students a boost by offering them a small prize to analyze your enterprise and recommend how to use social networking to promote it. You'll be blown away with what you get back and learn.
Doug Steiner has a real job in the financial services business in Toronto.
This column originally appeared in the November issue of Your Business magazine.
Special to The Globe and Mail