Using Online Marketing to Leverage Costs Benefits

18 October 2010

Some aspects of business truly seem too complicated to tackle for the regular Joe's and Jane's of the world just looking to open and run a small business. Take the financial term leverage for example. When you look at it as a general term, meaning a technique to multiply gains and losses, it seems a straight-forward, non-threatening term.

Then you get into borrowing money to spread the risk across a small base proportionately or leveraging revenue through fixed assets instead of variable cost assets or, everyone's favorite, dealing with derivatives to leverage assets by setting a margin. Confused yet?

Luckily, we'll avoid the hedge fund derivative jargon and focus only on how to leverage cost benefits though online marketing. For this, you don't necessarily need to know all about how to measure your leverage as it pertains to investments and finance. All you need to know is that online marketing presents a low-cost, low-risk marketing opportunity.

Think of creating an ad for your business here to understand how the Internet can help you to leverage costs.

You work on this ad with the hopes of attracting people to your business. It's colorful, it's informative, it's friendly and approachable it's something you're proud of. Now, think about how you're going to get it out there to the public at large.

You could pay a fee to place it in a magazine or newspaper. Surely a lot of people would see it there. It may cost a lot, but it's getting out to the public. However, you'd be taking a risk here. How many random, non-targeted people will actually become customers by seeing your ad?

This type of advertising does work, as evidenced by hordes of successful companies buying ad space, but you can't stop with just the magazine. That ad needs to be seen in sports stadiums, on roadside banners, and other locations. At the end of the day, you're spending a fortune on advertising and taking a gigantic risk.

Now, take that exact same ad and look at the online world. Not only can you advertise online for a fraction of the cost, but you can also get your ad out to a lot more locations and it can be seen by a lot more potential customers not to even mention that you can better target your advertising efforts online to focus primarily on your niche.

Online marketing means you're assuming far less of a financial risk and spending far less money. Your ad(s) will be spread over a large base and you'll actually have more control over how you're doing it. In other words: you have leverage here.

There are many different routes you can take to advertise via the Internet. You can pay people to advertise on their popular websites. You can build your own marketing campaign and target people via social networking sites. Any way you approach it here, you'll spend far less money, assume less risk, and always manage to retain some leverage in the advertising process.