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Man typing on laptop computer outdoors (Jupiterimages/(C) 2008 Jupiterimages)
Man typing on laptop computer outdoors (Jupiterimages/(C) 2008 Jupiterimages)

Part One: Online advertising

How to buy online advertising on a budget Add to ...

In this four-part series, we'll look at online advertising options for small businesses and how to monitor performance once the campaign is launched

Let's say that you just built a website for your restaurant. You'd like to get a few more people into your restaurant, and you're thinking the Internet can drum up some traffic. How best to invest your advertising dollars? If a $10,000 media buy isn't in the cards, where should you focus your attention?

There's no shortage of different ways to spend money on online advertising, and we'll be taking a closer look at them in the weeks to come. But for a small business owner, not all of them deliver the same returns, so where to begin?

First things first: Before you even consider advertising, make sure you have your fundamentals down pat. To start, your web presence needs to be up to snuff; meaning, you need a site that's functional and professional-looking. There's no point in advertising your website unless it's worth inviting people to in the first place.

Second, make sure that your website is naturally optimized to attract search engines. Search engine optimization (SEO) is an industry unto itself, but getting the basics right isn't hard with a bit of self-education. Make sure important information like your business name, contact, location, and relevant keywords are where Google and other search engines can find them.

Third, online advertising is no panacea. Especially if you're a bricks-and-mortar operation, a real media strategy also includes other, more traditional outlets that will get the word out to your market, including local print and radio.

Search advertising: "You want to be where eyeballs are," says Barry Hillier, Chief Visionary Officer at Dashboard, a new-media advertising agency. And if there's one place that modern eyeballs go, it's to search engines.

Search-based advertising, like Google's AdWords, is widely considered to offer the best return for small advertisers. Search ads - those little sponsored links that come up when you search for something - come with one enormous advantage: Because they appear after a user searches for something, the advertiser is catching them at just the moment they're pondering a purchase.

Search engine marketing (or SEM, in ad lingo) usually works on an auction basis. Rather than paying a fixed price, advertisers bid for how much they'd like to pay; the bids determine the prominence of the ads. If you purchase "cost-per-click" ads, you only pay when viewers actually click your link. The process is entirely self-serve: Advertisers log in and can start a campaign in minutes.

As Mr. Hillier notes, making sure that advertising outlay delivers on the investment is critical for small business owners; Google's fine-grained tracking and tweaking tools make it a great place to start, since you can control exactly how your money is being spent, and tweak your campaign until it delivers the kind of results you're willing to pay for.

Display advertising: "Display advertising" is the term for the banners that adorn many web pages. You could say they're the opposite of text-based search ads: They're big and pretty, but very few people actually click them.

"Banners are more of an awareness tool," says Terri Herbert, a digital strategist at Taxi(2), full-service advertising agency. "What's your biggest worry? Is it that people don't know about me, or that I'm not getting enough sales?"

Banners are typically a bit more involved than search ads. You can place them through large networks like Google's Display Ad Network, or through a traditional media-buying agency. (For major properties, however, an online buy can easily cost many thousands of dollars.)

Alternately, you can approach websites directly. For small businesses, a more fruitful tactic might be to target local websites, like the ones run by community newspapers and hyperlocal news sites: These often sell banner space that's both humanely-priced, and is entirely geared towards the local market you're in.

Local connections: "For many small businesses, generating word of mouth is incredibly important," says Gilad Coppersmith, Managing Director for digital and emerging media at OMD Canada, a media agency. "If a business can optimize its local presence that's the next rung up the ladder from the search."

There's an enormous amount of interest in location-based online services right now, but the sector is currently in flux. On a basic level, it's important to make sure that your company is listed in location-specific services like Google Maps and Yelp.

Then, there's services like FourSquare and Facebook Places, which encourage users to "check in" with their phones when they physically visit locations. Facebook launched a complimentary system called Facebook Deals, in which owners can offer special deals to those who check in. However, FourSquare is still a niche product, and Facebook Places has not been stratospherically successful so far - though it only recently launched in Canada.

Finally, coupon services like Groupon and WagJag have become enormously popular in recent months. Businesses can offer group discounts to local bargain-hunters (say, 40% off on a meal) as a loss-leader to draw in new business. Because these services are local by nature, they're proving to be a potent tool for reaching new customers in the right market.

Facebook: Facebook runs its own advertising system, which works in much like Google's search ads. Advertisers log in, create an ad, then bid on how much they'd like to pay for it. Facebook's advantage is that it knows an awful lot about its users, which means ads can be demographically targeted. Ads in hotly-contested markets will cost more; advertising your burger joint to 20-somethings will run up a bigger tab than pitching adventure travel to nonagenarians.

Facebook ads can link to any site you like, but increasingly, advertisers are using Facebook campaigns to encourage users to "Like" their Facebook Pages - promotional mini-sites on Facebook. Getting "Liked" by a user effectively adds them to a subscription list, and lets advertisers market to them directly.

It's hard to say what a Facebook fan is worth, but here's a sense of what they cost: This week, a study from Webtrends, an American analytics firm, suggested that the cost of acquiring each new fan through advertising works out to $1.07.

Special to The Globe and Mail

The series continues with a new post every Monday for the next month. Stories can be found on the Web Strategy section of the Your Business website.

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