Startups, learning, life and happiness by Paul Brown

Does advertising work?

If you found that an investment of 50p would return you £1 each day would you put a limit on how much you invested?

I think most people would invest as much as they could every day - and not stop.

The same applies to advertising - if you find a model that works it would not be rational to put a limit on it.

If you find spending X on adverts will return X number of people to your website or product and out of that X a further X will go on to make a purchase and the total of the profit from the purchases is more than you invested in advertising then BINGO you are printing money - you have found a model that works - and importantly one that you can scale up.

..Likewise if you are spending money and can’t justify a return from it then why are you advertising at all?

Good advertising is like a machine. It is a small machine which requires little maintenance and it will just keep running and providing you with new enquiries and new business.

Remember digital advertising is totally different to traditional advertising. You can see the cost of one click and the return ten of those clicks can get you. And if that’s a positive number you can ramp it up.

Have you ever heard “wow what a great idea but we just don’t have the budget”?.. Instead we should be saying “what a great idea, we have no budget for advertising that works”.