Startup Guides > Maximize Profit From Lean Advertising

The footwear industry has traditionally been a hot example of memorable advertising, with brands such as Nike and Reebok spending millions to sign athletic endorsers and hire ad agencies that create spectacular TV campaigns. Because viewers actively choose online videos, they watch them more attentively than they watch TV ads.

Lower cost isn't the only reason to consider online video. Because of channel surfing, DVRs, and the growing use of "second screens" (such as smartphones and tablets), fewer people watch TV commercials than in the past.

People watch more online videos each year, and savvy companies are taking advantage of that fact. Those with tiny budgets can create and distribute videos themselves at low cost; others can spend more to crowdsource content or hire expert distributors. Companies can also mix and match strategies-for example, crowdsourcing content but distributing it themselves. Instead of simply posting a video online and hoping people find it, companies hire inbound marketing firms, which use low-cost strategies to drive traffic.


Others Do It for You

Even large companies that can afford agencies are tapping into low-cost creative talent and crowdsourcing ads. Newer ad agencies have expertise in engineering ads to go viral; they use social media (and sometimes paid spots) to drive traffic.

Another inexpensive approach is to utilize online marketing sites. You can visit 40billion.com which is a fast-growing network of entrepreneurs and crowdfunders. They specialize in promotion of small businesses by broadcasting and promoting to its large network of several million users across the most popular social networking sites for small businesses - including Twitter, LinkedIn, 40Billion, and even Facebook. Innovative services such as promoted company listings were created for small entrepreneurs to tap into a growing, active network online without spending thousands on pay-per-click ads or traditional advertising. They also offer crowdfunding promotion and promote crowdfunders and their campaigns/projects.

Traditional Approach

Large companies with big budgets hire full-service ad agencies to create TV spots. Full-service agencies charge commissions when they buy time on television for traditional ads.

Create It Yourself or Find Outside Talent?

Developing an ad campaign involves two main tasks: Creating content and distributing it. A traditional agency typically charges $100,000 to $1 million to produce a 30-second TV spot, and networks charge $14,000 to $545,000 each time a spot airs. Companies looking to cut those costs can take a do-it-yourself approach or outsource one or both of those tasks to lower-cost firms.

Let's look at content creation first.

DIY content.

As you'd expect, the do-it-yourself approach is the cheapest-and sometimes it works remarkably well.

Outsourced content.

Many companies have turned to outside firms that, for a fee, post specs for a project and match it with freelance creative talent willing to work for relatively low pay.

Engineered to Go Viral

High-quality content is not the only requirement for successful lean advertising; effective distribution matters, too. Companies can again choose to do it themselves or to contract outside help.

DIY distribution

Some companies that outsource content creation handle their own distribution, putting videos on their websites and posting them on YouTube. Most, however, enlist at least some help drawing in viewers - a service known as "inbound marketing" (to distinguish it from traditional, or outbound, marketing). For a relatively small fee (typically less than $10,000 a year), inbound-marketing companies use search engine optimization and sophisticated analytics to help clients understand which of their content offerings draw viewers and which don't.

Outsourced distribution.

Companies seeking more-aggressive distribution often look to social media syndication firms. As ad viewership increasingly shifts online, traditional measures of cost and effectiveness, such as cost per impression - which is the dominant metric for print, radio, and TV ads - will become less relevant, and new metrics will be needed. Consider potential ways to measure "cost per engagement." By tracking the amount of time a person spends viewing an online video and seeing whether she forwards it, visits the company website, or begins following the company on Twitter, you can quantify the benefits your company receives from a campaign. Looking at those benefits against your expenditures will give you a good sense of the efficiency of your campaign, allowing you to compare online lean advertising techniques with traditional media efforts.

Most online video advertisements today promote large, established brands. That's because big companies, blessed with hefty ad budgets, have begun aggressively allocating some of their spending to the web. Over time, smaller companies' ads will become an increasingly large part of the mix. Web video and novel distribution strategies are perfectly suited to rapidly building brands on limited budgets - which is the core of lean advertising. Whether companies create campaigns themselves or enlist outside help (or some mix of the two), there's growing evidence that this new approach can have a big payoff.

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