Targeted Advertising May Actually Reach Fewer Potential Customers

Wait, what?  This is counterintuitive.  It’s not.

When it comes to building your community awareness, being selective about where your ad appears can actually mean fewer of your best customers ever see it.

Here’s why.

When you advertise broadly — across a wide network of locations — you reach a large audience. Some of them are ideal customers. Many aren’t.  But because the audience size is so large, the raw number of potential customers who see your ad can be surprisingly high.

The most common objection to advertising broadly is based in the belief that much of that advertising to ‘low propensity’ customers is wasted.  And most advertisers I speak with ask if they can select the screens they play on – i.e. pick the locations that seem most relevant to their audience.

I get that.  It’s intuitive.  But it’s focused on the wrong outcome.  Let’s use some simple math to illustrate why:

Targeted Advertising

• Advertise to 1,000 people
• Cost = $100
• 10% are relevant
• You reach 100 really strong target audience prospects
• Cost per audience prospect reached = $1

General Population Targeting (in Your Target Market)

• Advertise to 5,000 people
• Cost = $250
• 4% are relevant
• You reach 200 really strong target audience prospects
• Cost per audience prospect reached = $1.25

The bottom line is that an advertiser should not focus on how well they aimed, but how many of the right people they actually got in front of.  If you ask a business owner if they would accept less efficiency in order to grow, most would probably say yes.  More customers means repeat business, stronger word of mouth and an overall stronger market presence.

Of course, cost differences matter — and there CAN BE very smart targeted advertising executions — but that is a topic for another blog post.