E-Business Busters

Myth No. 2: If you build it, they will come.

Some Web site owners think that after spending money to set up their sites, they don't need to spend more money on advertising or promotion.

That's simply not true. Setting up shop is no guarantee visitors will come. If you want a successful, well-visited site, you must embark on an advertising or promotional campaign to get customers there. In fact, Web retailers probably spend more on advertising and promotion than their offline counterparts. According to a 1998 study conducted by the Boston Consulting Group, an international strategy and general management consulting firm, and shop.org, a trade association focused on Internet retailing, Web retailers reinvest about 65 percent of their revenue in marketing and advertising, compared with offline retailers, who reinvest only about 4 percent.

A good place to start, according to Frey, is to spend a minimum of $1,000 per month on a keyword banner ad on Yahoo!'s Internet directory, http://www.yahoo.com When you purchase this service, an ad for your company will pop up on the search page each time your company name is keyed into Yahoo!'s search engine.

"Often, small businesses get lost in big directory listings," says Frey. "But [buying a banner ad] helps people who are looking to find you--especially if you weren't able to secure a URL that is really obvious, which commonly happens to small businesses."

Frey also touts the importance of using banner ad exchanges and another emerging type of banner exchange program called "check-out banners," which are postage-stamp-sized ads that pop up on a Web page after a visitor has placed an order for a product. The ads are usually for products and services similar or complementary to the product or service the visitor has just purchased. You can place a check-out banner on another Web site or have companies buy banners on your site. These ads are designed to entice Web buyers--the type of Internet browsers most likely to buy again--to come to a Web site.

Entrepreneurs often underutilize data analysis tools that can help them learn more about their customers and prospects, and they don't bother to launch enough targeted e-mail marketing programs to spread the word about their products to their best customers. Offline advertising is also not being used to its full advantage, experts say, even though it's an important promotional avenue for Web businesses and for "click and mortar" companies--those that have both an online and an offline business.

Melissa Campanelli is a technology writer in Brooklyn, New York, who has covered technology for Mobile Computing & Communications and Sales & Marketing Management magazines. You can reach her at mcampanelli@earthlink.net.

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This article was originally published in the January 2000 print edition of Entrepreneur with the headline: E-Business Busters.

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