Outsourcing Small Business Local Online Advertising

Many small businesses outsource their online advertising to agencies to avoid the time and effort it would take to do it in house. Nevertheless, it is imperative for a small business owner to know exactly how their money is spent.

The purpose of this article is to provide a framework for the savvy business owner to ask the right questions to ensure accountability of how and where their advertising dollars are spent when trying to identify the best outsourcing agency for their company.

For example: you own a local small business and its monthly advertising budget is $1,000 and you are now in the process of finding an agency that will best suit your advertising needs. From a financial accountability perspective, here is the information you will need.

Find out if any campaign will use the search network, content network, or both. Using the content network is an easy way to deplete a budget with a lot of clicks but not enough leads to justify the spending. Internet yellow page advertising is geared towards search advertising, not the content network.

Ask if the advertising spend will be on both Microsoft AdCenter and on Google AdWords. Remember, Microsoft AdCenter is also running Yahoo. Any agency that just runs on one platform will reduce your reach and frequency, which will mean far fewer potential customers.

For the monthly spend, ask for the percentage markup per click. Business owners should always know the daily spend by ad network. This is critical. If you do not know the markup per click and distribution of spend by ad network, you will have no idea where your money is going. Beware that several of high profile agencies that specialize in small business advertising charge 100%-150% markup per click.

In doing due diligence, I called the top four agencies that specialize in small business advertising and there was only one that had full disclosure of how their customers’ monthly advertising spend was allocated. This company is AdHui (www.adhui.com).

Some sales reps were clearly caught off guard and didn’t know while others sounded like they had a canned script to evade and down play the importance of the questions. Furthermore, none of the stats was displayed on their dashboard. Again, AdHui was the only agency that displayed daily spend by network and was the only agency that gave complete disclosure of their markup per click.

This is they way it should be. Any fortune 500 company that advertises knows how their budget is spent. The same should go for small business.

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