Advertising is an effective way for start-up businesses to tell a large number of people about their products and services.

Advertising can pay off handsomely if your product is aimed at a large number of potential buyers. However, advertising can be also be precisely targeted, both online and in the press.

Niche businesses can advertise in specialist media; local firms can use local newspapers and radio to reach potential customers in their catchment area; and any business can benefit from online advertising targeted at those people searching for a specific type of product or service.

If your ads win you new customers, you can use customer service and your own direct marketing methods to convert them into loyal regulars.

This briefing explains:

  1. What advertising can do for you.

  2. How to choose where to advertise.

  3. How to measure real costs and real results.

  4. When to call in an agency.

1 What are your aims?

1.1 Begin by establishing who your target customers are. 

  • You need to have a clear picture of who you are trying to reach.

1.2 Before advertising, decide on specific goals. For example, you might want to:

  • Create awareness of your new business.

  • Tell people about a special opening offer.

  • Build the image of a product or business.

  • Compile lists of leads for direct marketing campaigns or sales calls.

  • Increase traffic on your website or attract more people to your shop.

  • Make immediate sales by encouraging telephone or online sales.

1.3 Plan your advertising in terms of results. 

  • Who are you trying to persuade? 

  • How can you reach these people? 

  • How quickly do you need results? 

  • What is the one thing you want people to remember most from your advertisement?

2 What platform?

Which media will reach the right people? Look at where your competitors advertise to help focus your thinking.

2.1 Pay-per-click advertising (PPC) is an attractive option for any ecommerce business or firms with a website. It gives small businesses the opportunity to stand out online, even against bigger firms. It can ensure your business name appears prominently when people search for products like yours. You can test keywords and phrases to find ways to stand out from competitors and improve your results over time.

  • PPC can be highly targeted and, done well, results can be achieved almost immediately.

  • You only pay when someone clicks on your ad and you can control costs by setting limits.

2.2 Online advertising includes ads on websites such as banner and pop-ups ads. You can also advertise on Facebook. It’s vital that you place your adverts in the right place. Services like Ad Choices allow you to put your adverts in front of those that have shown an interest in your type of business.

  • Online advertising can increase your profile and, with targeting, you can build an online customer base.

  • However, you may damage your reputation if your adverts are intrusive or annoying. It can also be hard to measure return on investment.

2.3 Printed copies of national newspapers are losing readers but still offer a useful way to reach large groups of consumers.

  • They offer high circulation, low cost per reader, prestige, flexible timing and a choice of known readership profiles. 

  • The disadvantages are the high cost per ad, high cost per target customer and the short life span of a daily newspaper.

2.4 Local papers, freesheets and community magazines can be ideal for local advertising.

  • They have the geographical focus needed for shops or local services, are inexpensive per ad and good for test marketing.

  • The disadvantages are restricted geographical coverage and low readership.

2.5 Trade and technical journals - plus club and industry body magazines - can be ideal if you supply businesses or other special groups.

  • The main advantage is the huge variety of publications, offering accurate targeting of well-defined and committed readers.

  • The disadvantages are usually low circulation and a high cost per reader.

2.6 Lifestyle magazines, including hobby magazines, are suitable for advertising consumer goods.

  • The usually have well-defined readerships and scope for colourful, high-impact advertisements.
  • However, the cost per reader is high and adverts jostle for the reader’s attention.

2.7 Trade and business directories, such as Yellow Pages (and, work well where customers naturally turn to this kind of reference source.

  • The advantages are high circulation, long shelf life and your ad is seen by customers when they are keen to buy.
  • The disadvantages - long publication lead times and slow results - may make this sort of advertising unsuitable for start-ups.

2.8 Transport and poster ads (eg on buses, bus stops, train stations and billboards) can be the right option for advertising to shoppers and commuters. To see what outdoor sites are available, check the BRAD website. Visit sites to check they really do get the traffic you need.

  • The advantages are impact, 24-hour exposure and, often, low site costs.
  • Waiting sites work best, such as bus stops and station platforms. Passing sites, such as billboards, must be eye catching.
  • The disadvantages are slow results and the cost of producing good colour posters.

2.9 Local radio and cinema advertising may be useful for selling to the public in a particular locality.

  • You can target different listeners at different times of day, at fairly low advertising rates.
  • However, radio ads need to be professionally produced and need to be repeated to make an impact.
  • Cinema ads can be effective for retailers and restaurants.
  • National radio and TV are usually unsuitable for start-ups.

2.10 Direct mail and door-to-door leaflet drops can be economical, cost-effective and under your control.

3 Choosing a publication

If you are going ahead with advertising in conventional print media, look for a journal that can deliver what you need.

3.1 Ask yourself three key questions.

  • Is it read by your potential customers?

  • Is it read partly for its advertisements?

  • Is it relatively inexpensive to advertise in?

3.2 Many start-ups find that advertising in trade magazines, special interest magazines and local newspapers is highly cost-effective.

  • For example, if you sell to caterers, one obvious choice The Caterer.

3.3 For a comprehensive listing of publications - and poster sites, websites and radio and TV stations - check the BRAD website on

3.4 Many types of online advertising, including pay-per-click, work by appearing when people search for key terms. So the choice of ad location is responsive and driven by consumer behaviour.

4 Media advertising packs

4.1 Most publications will provide you with an advertising/media pack, giving the facts about the publication. These will include:

  • Advertising rates (see 6).

  • Circulation - the number of copies sold.

  • Readership - a much higher figure than circulation, as a whole family or office may read a single copy.

  • Readership profile - analysing the readership’s characteristics and spending patterns. Ideally, look for circulation figures verified by ABC.

Ideally, look for circulation figures verified by ABC (the Audit Bureau of Circulation

4.2 From the readership profile, estimate how many readers might potentially buy your product. Then work out the cost for you to reach each of these potential customers.

  • For example, suppose you spend £1,000 on an ad in a magazine with 10,000 readers, 50% of whom are potential customers.

    The advertising cost is 20p per potential customer (£1,000 for 5,000 readers). 

  • If one reader in ten will be interested in the ad, the cost of reaching each potential customer is £2 - ten times as much.

4.3 You may choose to advertise in a publication with a high cost per potential customer.

Two good reasons would be:

  • The publication’s readership includes exactly the people you are trying to reach.

  • The publication has an image with which you want your product to be associated.

5 The rate card

5.1 A rate card will usually show prices for three main types of ad:

  • Classifieds, semi-display ads and display ads.
  • Smaller ads are measured and priced in column centimetres.
  • There are premium prices for special positions (eg back page or centre spread).

5.2 In many cases - especially on trade journals - prices are negotiable.

  • You may be able to win yourself a price reduction, an extra ad insertion or a better position for your ad. It helps if you are going to run several ads.

  • If you place an ad yourself, as opposed to going through an advertising agency, you may be able to save 10-15%. The quoted price includes the commission an agency would take, but the media owner is not obliged to pass this on. An agency may be able to negotiate a better rate.

5.3 Try using tactics to get a better price.

  • Mention your budget, but appear undecided about who to spend it with.

  • Mention a rival that you are considering using.

  • Many trade publications are prepared to accept very low prices at the last minute, if there is ad space to be filled. This may mean less than favourable positioning.

5.4 Use repeated ads, but do not be persuaded to buy more space than you need.

  • Planning a series will produce a more effective campaign than using one-off ads. It will also cut the production cost per ad.

5.5 The position of your ad is important.

  • Make sure your ad appears in the right section.

  • Right-hand pages, and top right-hand corners, catch the reader’s eye most often in publications, banners work better online. 

  • If your ad has a coupon for readers to cut out it must be at the edge of the (preferably right-hand) page.

  • If you frequently advertise in the same publication or website, you may be able to negotiate the best positions at no extra charge.

6 Managing online advertising costs

6.1 Most online advertising allows you to control your costs and set budget limits.

6.2 Online adverts are generally paid for in one of two ways. One is Cost Per Mille (CPM), which is the cost per thousand impressions – in other words the number of times your ad has been seen. The second and more popular method is based on customer performance. In other words, it’s based on cost per click or cost per acquisition. 

6.3 With pay-per-click advertising (such as Google AdWords) you can set many different kinds of limits including campaign limits or daily limits. You can also limit how much you are prepared to pay per click.

6.4 Social media sites that offer advertising, including Facebook, LinkedIn, YouTube and Pinterest, also offers ways to manage your budget and target your advertising at specific audiences.

7 Measuring an ad’s success

Every time you make a sale, or take an enquiry, find out how the customer heard of you.

7.1 Work out which advertisements, in which locations, are getting you results.

  • Ads that generate sales are successful.

  • Ads that generate no enquiries are failures and should not be repeated.

  • Ads that generate dead-end enquiries, that do not turn into sales, cost you even more, because of the resource they tie up.

7.2 Monitor how your campaign is working.

  • Measure the number of enquiries resulting from the ad - giving the cost per enquiry.

  • Measure the number of sales resulting from the ad - giving the cost per sale.

    In advertising jargon, this is called the ‘effective ratio’ or ‘yield’. Allocate your advertising budget with media outlets that give the best yield.

7.3 Consider what kind of sales are produced. 

  • Are they large repeat sales with good margins, or small one-off sales that generate little profit?

7.4 Calculate the indirect costs of advertising.

  • For example, you may find a £100 ad nets a one-off sale with a profit of £100. 

    But that sale, plus enquiries that did not convert into sales, may have taken up 20 hours of staff time - a huge hidden cost.

  • If your profit per new customer is less than the cost, you are throwing money away.

7.5 Bear in mind that advertisements produce delayed results. 

  • One customer may order today. Others may wait until they have seen half a dozen ads and feel comfortable about you. 

  • Other customers may order in two years’ time, when they finally need your product.

Measuring an ad’s success will depend on what your aims were in the first place (see 1).

8 Calling in the professionals

A good agency will have the expertise to create an effective advertising campaign for you. It can also help you find the best publications to achieve your objectives and get value for money.

8.1 As a rough guide, use an agency if your advertising budget is at least £10,000. 

  • Expect to spend around 15% of your budget on agency fees. 

8.2 Free advice is available from your local business support organisation.