Why Do Companies Invest In Advertising?

Why Advertising Is an Investment Not an Expense

Invest In AdvertisingDon’t get it twisted. Yes, advertising is an expense item on your profit and loss statement but in business, advertising is an investment, not an expense.

If you don’t see a return on your investments, you stop making those investments.

Advertising is the way you get the message about your solutions to your ideal customer. When you do that, you solve their problems and you fulfill your business’s promise.

Why Companies Invest In Advertising

There are 3 primary reasons why companies invest in advertising.  They are to inform, persuade, and remind.

  1. Inform: This type of marketing creates product, service and brand awareness. You’ll use advertising to announce new product launches, update on the benefits of a product, and so forth.
  2. Persuade: This is the time your advertising tries to reassure the audience members that the purchase is the right choice.
  3. Remind: This type of advertising reminds people of their problems so that you can then offer your solutions.

When you develop effective ads that correspond to your goals, you end up earning money, not spending money. Yes, you had to spend money to run the ads, but if you didn’t run the ad, you wouldn’t be making money. Advertising is just as much an investment as the plastic to create your widget is.

Sadly, some business owners keep looking at ads as an expense, and they worry about spending money on things that aren’t seen as necessary. But again, advertising is just as important as buying the materials to create your widget. If you have a plan in place and follow it, the expense will pay off and you will earn a return.

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How Advertising Will Help Your Business

There are a number of ways that advertising will help your business:

To run ads effectively, you need a real plan. Understand how your company is positioned in the world and know what your customers need and want. Find someone who knows what they’re doing to help you create persuasive copy and ads for the various platforms.

Don’t try to run ads without the right information and training, because you won’t be successful. There are a lot of platforms that offer specific customer targeting options but if you don’t know who your audience is, it will be hard to target them appropriately.

Use the analytics in the platforms you run ads on to find out what your return on investment is. If you’re making money, keep running the ads. If the money you’re making goes down, change something about the ads but don’t stop them.

Advertising your business is something that you can’t skip. If your potential customers don’t know that you exist, you’ll never be able to sell your products or services to them. You don’t have to start producing big TV commercials or start spending eye-watering amounts of money. There are many low budget marketing techniques that you can use to get your business in front of your potential customers.

Free Checklist: 12 Ways To Make More Money In Your Business

Smart companies invest in advertising. They know that people can’t do business with you if they don’t know you exist. You’ll never make any sales if you don’t have customers coming into your store or traffic to your website.

Every business owner wants their income to feel secure and stable. Unfortunately, it doesn’t always happen right away. Many entrepreneurs and small businesses hit income plateaus, but there are ways to push beyond them. One stream of new income might not add up to much, but if you set up more than one income stream, it can become a river of revenue.

For more information download the checklist 12 Ways Make More Money In Your Business. Any additional income can give your business stability, and perhaps even growth if you reinvest it in ads, software and other items that you really need in order to expand your business.


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