The decision to advertise

Today we’ve got a guest post. Steve Jones is co-founder and editor of SQL Server Central, a web site with over 800,000 subscribers and nearly 3 million page views per month.Whether to advertise or not often seems likes a difficult decision. It isn’t. Here, Steve explains why.

I’ve never had to really make a decision about whether to advertise my product or not. It’s a simple decision: you have to advertise.

I didn’t like learning that fact, but it’s something that was drilled into by a business partner and something I observed while running Those clients that continued to regularly advertise sold more products.

And they bought more advertising.

And sold more products.

You can see where this cycle is leading. The more that people are aware of your products and company, the more likely they will think of you when they’re making a decision. It’s an idea that is taken for granted by the advertising giants on Madison Avenue, and it’s the reason that soft drink, beer, and car companies advertise continuously on television. It’s highly unlikely that you’ll stop what you’re doing and go purchase their product that minute, but the continuous exposure to their products does influence you the next time you are making a buying choice.

Over the last 7 years I’ve had the opportunity to work with a number of software vendors in advertising their products. I’ve seen successes and failures, and the one lesson that I don’t often see learned is the value of advertising. I have worked with many small companies that are looking to break into the market or grow their sales and they often seem to want predictability in their advertising.

I have seen quite a few companies seek to tie the first few advertising campaigns back to immediate sales or they consider the advertising  a failure. Often I would work with companies, giving them a trial period of advertising during which they would have very low rates, even free, in order to show them some value for the effort spent.  I learned that to grow my client base, and eventually charge higher rates, I needed to help educate the marketing people at small software companies who often were tackling this job for the first time in their careers. I’ve worked with very intelligent developers-turned-CEO-wearing-the-marketing-hat that needed help understanding the value of advertising.

I had one marketing manager that worked for a small software company bringing out their first tool for SQL Server. They were nervous about spending money on advertising and in discussions with the employees, it was apparent that most of them were technical people wearing various other hats for marketing, sales, and other departments. They decided to run a two ad campaign with us and “test the waters.”

The day after the first advertisement was sent out, they called to say they hadn’t seen many downloads. I talked a bit about the fact their ad wasn’t engaging and their product was in a new space and might take some time for people to learn about it and decide if it was worth purchasing. The manager didn’t want to hear this and wanted to make a sale to pay for his advertising. He pulled his second advertisement and argued quite a bit about paying for the first. Less than a year later he was out of business.

I had another company selling a reporting product want to advertise with us, but they were concerned about the response rates. I gave them rates based on some of our long term advertisers and negotiated a 2 advertisement “test” for free with a further 3 month run of paid weekly advertisements. They did get a number of downloads from the tests and the first few paid advertisements, but not many sales. They again blamed our site, the only place they had tried advertising and cancelled their contract. They too were out of business in a year.

I have even been accused of "faking" numbers in order to make sales. And more than once I’ve seen the companies fade away, not because their products didn’t fulfill a need or weren’t well written, but because they couldn’t sell enough copies. I was surprised and unsure of how to answer these charges since I had people at Red Gate Software, sqlSentry, ApexSQL and others that were constantly praising the value of the site. Both Red Gate Software and ApexSQL increased their advertising contracts over a period of four years and saw their sales grow substantially. I even had open orders from both companies that they would take unused slots and  I could just bill them for those advertisements without calling them for approval.

Over time it becomes easier and easier to predict the value of an advertising campaign, and gauge how many sales will result from $xx being spent on advertising. With lots of tracking data, you might even learn to develop trends on which ads and which locations are most valuable for your particular product, but there’s one thing that I know is important in the software business.

You need to spend money on advertising.