What is advertising?

I bet you never really thought about that. What exactly IS advertising. It seems obvious, but what exactly is it? After working in the field for 30 years I think I have the answer. Advertising is when you, the business owner, works in a variety of ways to influence your existing or would-be customers to buy from you, do business with you, or to influence their opinion of you or your products/services. For more information about what advertising is or more thoughts about how to use it, click here.

Who am I and why am I writing this?

I worked in radio, print, video, and social media. We hosted trade shows and produced magazines. All in all, I have been in marketing and advertising working for myself or working for someone else, for over 30 years.

I am writing this because there is a need in the business community. There is an abundance of ignorance on the topic and I felt that it’s about time that someone, at least tries, to set the record straight about this topic.

My experience.

I started in radio sales in the early 90’s. I mention my stint in radio sales, only briefly, because you are here for something other than my life story. I tell part of this story only to explain how I came to the conclusions that I have made in advertising… nothing more.

For more information about my personal experience in advertising, click here.

After the radio station, I began working for myself in video production. I did that for about 5 years. While doing that I began working for a local client who was selling ATV’s and dirt bikes. I did their marketing, both video and print. After that, I started a real estate magazine. After COVID finished it off 17 years later, I am working toward doing some of the things I had always thought about doing, but couldn’t find the time to do before.

So… what does any of this have to do with advertising? I have learned allot and that is what I’m going to share with you.

Different types of advertising.

Did you know that there are different types of advertising? Oh, you mean, tv, radio, newspaper, social media and email marketing? No, we will discuss these more later, but there are at least two main types. By the way, these names are not industry terms, but my own. They are…

• Relationship building advertising
• Transactional advertising (most common)

When most of you think of advertising, you probably think of the last type, transactional. Transactional advertising is what you do when you just need a few new jobs this month to pay the bills. This kind of advertising is the kind typically preferred by small businesses who have little or no marketing budget or experience. Most businesses use transactional advertising expecting an immediate ROI. If they don’t get an immediate cash in for cash out experience, they quit and feel cheated.

This is different from the other type of advertising, relationship building advertising, because you’re frankly not building a relationship with your community. You’re only focused on your immediate needs (quick fix) to get you through.

Then there’s relationship building. This is the kind advertising typically preferred by larger businesses who have an established customer base and are looking for additional growth. Relationship building is what it sounds like, building a relationship with your community of would-be customers.

The reason I call it relationship building is that you are creating a reputation for your business.

The mediums (tv, radio, newspaper, social media) are are not what sets these two apart, but rather the message and the consistency. Both, transactional and relationship building are good and should be used, but we need to discuss more about each and how to use them to understand what you can expect realistically from each.

Reasons used to avoid advertising.

Reason no. 1: Business is good.. no need to advertise.
Reason no. 2. Business is slow, I can’t afford to advertise.
Reason no. 3. I get all of my business by word of mouth.

For more about “word of mouth advertising” click here.

When I first began radio sales, my station manager took me around to show me the ropes. One of the first clients he approached told him. “I get all of my business through word of mouth advertising”. My station managers response was.. “well, that’s the best kind of advertising there is” and walked out.

He basically told that man (and me, new to sales) that word of mouth is as good as it gets. That left an impression on me. I’m here, 30 years later to tell you that word of mouth is NOT the best kind of advertising, in fact it’s it’s no advertising at all.

I’ve benefited from word of mouth, as well as suffered from it. Over the years I have witnesses many clients that word of mouth has destroyed. I won’t use real names, but here’s one such example.

We had a client who also owned a restaurant. I started my very first social media group about eating out in our town and invited him to join. I quickly had developed a decent membership in the group and it was fairly active.

One day this client decided to promote his restaurant in the group by sharing a little blurb about how great the food was. What followed was a slew of negative comments about the restaurant. It only takes one negative comment to lose business, but this was one after the other. The food was cold, the service was slow and the prices were too high were the complaints. I had to eventually delete his original thread because it had devastated his business. A few months later he had to close his doors. I don’t know that this thread was directly responsible for his business closure but you don’t recover quickly from an onslaught like that. It certainly didn’t help him at all.

Word of mouth can be good or it can be devastating. And frankly, a negative word gets around much faster than a good word, and it carries more weight too. All it takes is one bad or angry customer to poison the minds of many would-be customers who witness their comments and it can take months or even years to recover. Remember, word of mouth cuts both ways and most often works against you. Word of Mouth advertising is unreliable and unstable and while it’s certainly good when a customer recommends you, it’s very unwise to rely on customer comments, reviews and recommendations as your only source of advertisement.

I just use free advertising via social media.

Now what could be wrong with free advertising? Well, nothing, unless you consider that anybody can do it, including your competition. When you engage in a business and rely on free or cheap advertising to get the word out about your business AND you start to do well. Word of mouth gets around and soon you’ll have allot of people wanting to do what you do. When they realize that it only takes free advertising to get off the ground and make some money, they too will be finding ways to do what you do and that saturates the market making it harder for you to do business.

This happens over and over again. Free advertising is never a long-term solution.

One such example. Again, no names, but we had a different client who was installing storm shelters. It was a bad year for storms and he was swamped. I asked him about advertising and his response was to tell me that he had more business than he could handle and that advertising was of no value to him at that time.

I saw him a few years later at a trade show and he told me then that he had made a big mistake not advertising. His competitors were saturating the market and he now had to advertise just to stay in business. He told me that he should have advertised when times were good to help him through the rough times that came afterward.

In 2020, when COVID hit, my real estate clients decided to do away with the printed magazine and focus entirely on free social media ads. The magazine died and frankly so did most of their businesses.

Did social media work in selling homes? Yes! They were selling houses left and right. You may remember the housing market boom that followed COVID?

I warned them that selling homes via social media was a bad idea, but unfortunately, they didn’t listen to me.

Why was it a bad idea? Well, when I first started that magazine, the first client that helped me get it off the ground, told me that if I ever advertised a FSBO (for sale by owner) home in the magazine that she would pull out and never advertise with me again. The reason? It’s simple. the magazine gave them an advantage over “do it yourselfers” who didn’t want to pay a real estate commission. If I had FSBO’s in the magazine, they would lose sales. So when these same agents decided to put their homes on facebook and Zillo and not the magazine, they created a marketplace for real estate that was free and easy, not just for them, but for anybody wanting to sell a home without paying a commission.

To prove my point, my wife witnessed a local homeowner wanting to sell their home asking for advice on a good real estate agent. The advice they were given was “don’t use a real estate agent, sell it yourself on facebook and save the commission”. The internet is awash with articles telling home sellers how easy it is to sell their own homes on facebook.

The lesson is that free advertising, while not a bad thing, should only be used lightly and never relied upon as your only advertising! Be careful not to destroy your business in order to save money on advertising. Give yourself the advantage, not your competitors.

What should you do?

The wise way to advertise is to use all available options, transactional as well as relationship building with an emphasis on relationship building.

We will be sharing ideas how to do this in our business newsletter. If you are interested in learning more, subscribe to our free newsletter via the form below.