Why Advertising Fails for Small Businesses

It is a conversation I have heard many times. “I tried advertising once or twice and all it did was wasted my money.” If you own or manage a business, chances are that you have been approached by someone selling advertising. Perhaps you have even tried some local radio ads, a discount coupon book, or maybe you have played around with Google or Facebook ads. If you have tried advertising in the past and have been disappointed by the results, you are not alone. So what gives? We are left asking why advertising fails for small businesses? There are four primary reasons:

1. We misunderstand the purpose of advertising 
2. We advertise in the wrong place
3. We advertise to the wrong people
4. We shotgun our advertising resources 

We Misunderstand the Purpose of Advertising 

For at least the first decade of my career, I (like many) believed that the purpose of advertising was to increase sales. Therefore, successful advertising would be directly linked to an increase in sales. If the advertising did not lead to more sales, then it was the advertisement’s fault. However, this belief can lead us down a very wrong and costly path. 

The actual purpose of advertising is to gain attention. Sure, the goal would be to ultimately have the attention lead to more sales. The problem is that when we simply blame advertising, we miss a whole chain of events that take place in between gaining the attention and getting the sale. We are going to explore this in full detail in our next marketing tip. For now, the point is that sometimes the reason advertising fails has nothing to do with advertising. We can gain lots of attention but fail to make it easy or desirable for interested parties to make a purchase. Often, advertising becomes a scapegoat for much bigger problems. 

We Advertise in the Wrong Place

Sometimes the reason why advertising fails for small businesses is we advertised in the wrong place. As a small business, we can only budget a few resources toward advertising and cannot be everywhere at once. After advertising fails in one or two places, we fling up our hands and declare that advertising does not work. The thing is, advertising does have a risk factor to it. We have to be willing to try new things and experiment until we find what works for us. The great thing about advertising today is that it is much easier to go directly to our target market. We can spend less more effectively by advertising to those who are already interested in what we have to offer. For more on this, check out Marketing tip #5: Finding The Best Place to Sell Your Product. 

We Advertise to the Wrong People

Another reason why advertising fails for small businesses is we advertise to the wrong people. Arguably, some of this can be corrected by selecting the right place to advertise. But there is more to it than that. For example, we could be in the right place but have the wrong message. In order for advertising to gain attention, it has to be relevant to those seeing it. We have to understand what matters to our customers and speak directly to their concerns, needs, and desires. If we don’t understand who our customers are, no amount of advertising will produce results. 

We Shotgun our Advertising Resources

There is a deadly myth about advertising that says to be effective we have to show up in as many places as possible. While it is true that this can be very effective, it only works with big budgets. When we scale this down to a small business budget, it causes problems. It is one of the biggest reasons why advertising fails for small businesses. We try to shotgun our limited resources into as many places as possible.

We run a few radio ads across multiple stations, try $100 bucks on Google Adwords, pay to be in a coupon mailer, and so forth. The issue is that we never gain enough traction on any one medium to effectively get noticed. When working with smaller budgets, it is best to really figure out who our people are and where they are. Focus on consistently showing up there. People need to experience the same advertisement multiple times before it sinks in.

For example, if radio is your thing, pick one station and own it. Run many ads on one station during prime listing hours. If social media is your platform of choice, commit to it. Pay for enough ads and post enough posts to have your message noticed. Trying to be everywhere on a small budget simply does not work. As your budget grows, add more advertising options while maintaining your hold on the things you know work. But don’t try to do it all at once. For more on this, take a look at my Marketing Tip about Advertising Your Business on a Small Budget. 

Final Thoughts

This has been a fairly broad overview of some very complex topics. But don’t worry: we are going to dive into more detail over the next few marketing tips. The next marketing tip will look deeper into the purpose of advertising and how to set up our businesses to capitalize on the attention gained from advertising. Ready for more? Read about how Successful Advertising Starts With Business Optimization.