Small Business Marketing Blog from Duct Tape Marketing

I have to disagree with Joe Narrowcast on the point that one can track the effects of TV advertising with budget media firms like Spot Runner (which is a joke of a company).

If my small business sells widgets and spends $1000 for a month's worth of TV ads, and $1,000 for a month's worth of pay-per-click and $1,000 for a postcard campaign, how will I be able to track the effects of the TV portion of my campaign?

The fact is, small business owners do not like TV advertising because it's too complex, too expensive, and too difficult to gauge how well it works. The same goes for radio.

Granted TV and radio advertising works for some businesses (otherwise they wouldn't do it), but I don't think it works well for small businesses for the reasons listed above. It's got too low of a "bang-for-the-buck".

Nowadays with Tivo and other HDRs, it's easy enough to skip the commercials. The only things that will work will be late night infomercials, shopping shows like QVC, product placements, and endorsements on shows like Oprah.

Actually, you can target with TV. The award-winningest dotcom custom ad producer and air time agency Cheap-TV-Spots does it all the time. It's just different than internet advertising. TV allows you to track just fine, too. Once again, it's different than the internet, but don't fool yourself into thinking the the internet is everything - because it's not. Lot's of big screen TVs are sold everyday, but they're not used primarily for web surfing, are they? Lot's of locals watch national broadcast and cable TV shows with local ads inserted. "Hey, I do feel like a pizza!" they exclaim after seeing the pizza ad. The trick to TV is getting a quality custom ad for a flat rate and air time with no extra commissions, no minimums and no long term contracts required. CheapTVSpots is the only international discount TV, web and mobile agency that can reliably commit to that simple policy.

Spot Runner is the company you love to hate. It was started by two high-energy guys who wanted to buy media efficiently for the 2004 presidential campaign. The problem is that TV advertising doesn't really work for small businesses, and that Spot Runner had a flawed strategy from the start. Since 2006 the founder Nick Grouf made missteps after missteps to get the company on the right track, which in all honesty, is hard to do when you've got $60M worth of investors breathing on your neck.

It is now the end of 2008 and I can tell you on thing that should let you know that Spot Runner is DEAD: Look at LinkedIn and see all the people who have defected. If the company was going anywhere, why would all the early employees with oodles and oodles of stock options jump ship?

Prediction for 2009: Spot Runner as we know it closes its doors by the summer and licenses out its media-buying technology for a song and a dance.

Spot Runner has a unique offering to potential customers, but it is something that just does not work very well. There are not enough "one-timers" to keep Spot Runner afloat under its own power because, frankly, TV advertising does not work for the many small businesses that Spot Runner appears to target.

Spot Runner can only make a small bit of money from large national companies who have local reps that want to boost their ego with a 30-second TV commercial. For example, Real Estate Agents. This type of business means that Spot Runner can only earn a small markup from buying a 30 second spot from the local TV networks and then reselling it to a customer. Furthermore, there are only just so many 30-second spots out there...and therefore there is a glass ceiling to the amount of profit that Spot Runner can earn in the US.

With dozens of millions of dollars that investment firms are pumping in Spot Runner, they can only hope that enough buzz will be generated about this unique business model and that a larger company like Yahoo or Google will buy them up. Just look at LinkedIn and you'll see so many ex-Yahoo/Overture people working at Spot Runner. These people left presumably to start something new and oh, yeah, probably chase lucrative stock options. Unfortunately for them, by the time their options mature in 2010 they will be able to cash them out and buy a week's worth of Venti Lattes at Starbucks.

The thing is that we haven't heard much, if anything about customer success stories. There probably are not any. No small business owner is going to grown their business and hit critical mass because of a $3000 TV media campaign. Most small businesses don't have that kind of loose change to spend anyhow on something that is untrackable. After all, how can a small business owner monetize how much new or additional business was generated through a TV commercial? Answer: He cannot.

Our prediction: See Spot die.

Having worked at SpotRunner, I can tell you that although the idea is revolutionary, I doesn't make sense for small (or a medium)sized business. 1st yes, the ads are 500.00, They are yours as long as you opt to go with a tv schedule that SpotRunner provides. The problem here is that either way, to gain any kind of decent marketing or awareness, a small business owner will easily shell out 5000 dollars for a local marketing campaign that will not be running in the most desirable slots. A Pay Per Click campaign would probably have 30fold better yield.

The problem? These ads are not targeted whatsoever. You can't target TV, as you can search on the internet. You are assured that when someone clicked into your site, it was done because a search term/product or service that you offer, was relevant to their needs.

John,

Thanks for another great program. I know a lot of local businesses in my area that are paying more for lower quality productions and running them in limited market venues.

I still would like to hear from them how to escape from the indistinguishability that templates sometimes create. I am sure they have an answer but I did not find it on their site.

I think it was really wise of them to target the local market as other online companies are starting to do that more in search.

What really impressed me in looking at the overall story is that the continuing innovative ways that companies are coming up with for the empowering of businesses.

Another part of the story to me is that it adds another tool in the area of everything being able to be customized.

I don't mean the tool itself alone, but being able to do it when and where you want that will fit into the most convenient time and place.