Internet Business

Banner advertising can dramatically help you increase traffic to your web site. Banner advertising can be a very cost effective marketing solution and can help you to gain access to millions of internet users. It can also prove to be a huge waste of time, even creating a net loss rather than increasing your bottom line. So we’ll try to guide you onto the path to true results and a very successful Internet Marketing campaign using banner ads.

First things first: What’s it going to cost you? Assuming you’re going to design and building your own banners, you can still loose money on the cost of advertising if you’re not careful. Work out the estimated cost of each banner advertising campaign:

Cost-per-Visitor: If you pay $10 per thousand impressions ($10/CPM), and you get a 2.0% click-through (20 visitors), your cost-per-visitor is $.50 ($10 per 20 visitors).

Cost-per-Sale: Now you know about what you’re going to pay per visitor. So what does that amount to per sale? Well, if 1 in every 20 visitors buys your product, your cost per sale is $10.00.

Total Sale Amount : $9.95 USD Paypal’s Fee Amount : -$0.59 USD Net Profit Amount : $9.36 USD

So if each sale of your product produces a gross profit of $9.36, then your net profit per-sale will be -$.64 ($9.36 gross profit - $10 cost-per-sale). This campaign is not profitable!

As you can see, something has to change in order to make a profit. That’s why it’s important to track and calculate every campaign. So what went wrong with this example?

-Paying too much for the banner space?

-Need a better click-through rate?

-Need to charge more for your product?

The truth is that only you have the information required to decide but at least at this point you’re in a better position to make a qualified decision.

Return on Investment Ratios: Your return-on-investment (ROI), before non-marketing expenses, is 0.0% ($0.00 total net profits with a $10 investment).

Experiment by advertising on multiple sites or using different banners if your budget will allow it. Find the perfect campaigns that yield the highest ROI.

A few terms to know:

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Many small businesses are pretty comfortable with standard, conventional marketing methods like newspaper ads, industry publication ads, or even radio and TV ads. But promoting your business on the internet can offer many advantages that will not only get your business noticed, but save you money as well.

Web sites are the most obvious internet marketing method, since virtually all businesses large and small have a web site for providing information to their customers. If your business doesn’t currently have a web site (even a small one), you are losing out on an enormous marketing opportunity and could be giving an unfavorable impression to customers who have become accustomed to accessing web sites 24/7. Customers are also becoming more comfortable with shopping online from company web sites. Recent studies show that more than 55% of all shoppers during the 2005 Christmas season made purchases online, making online shopping one of the fastest growing benefits a company can offer from its web site.

Web-based advertising is another promotion strategy that can be cost-effective and produce great results. Ads placed on sites that are compatible or related to your business are a good place to start, or search engines like Google and Yahoo offer click-ad programs that can be very inexpensive yet quite effective. Also consider listing your company in reliable internet directories (both paid and unpaid), as well as optimizing your web site for good search engine rankings.

E-Newsletters are another great way to communicate regularly with your customers. Repetition is key here; sending out a single email or newsletter issue cannot deliver effective results. Consistency builds your credibility and also keeps your company’s name and message in front of your customers on a regular basis.

Promoting your business on the internet can be much less expensive than the more traditional methods companies have used in the past. More and more, customers are looking for you on the internet, and having an internet presence that uses a variety of internet promotion strategies can be a valuable tool for your business.

Lauren Hobson is the Editor of Biz Talk Newsletter, a free monthly publication designed to provide small businesses and non-profits with tips and techniques to help them make the most of their web sites and marketing efforts without spending a lot of money. Biz Talk is published by Five Sparrows, LLC. Visit us at http://www.fivesparrows.com or subscribe to Biz Talk at http://www.fivesparrows.com/biztalk.htm

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