People throw the term ROI around a lot, especially in my business. I’m guilty of it myself. I often tell prospective clients how my ad agency averages a 500% ROI. I say this because it’s true, and also because it sounds cool (I admit that). But when people talk about ROI they are almost always focused on the R for Return, and not on the I for Investment. That letter I is so important, and rightfully has a double meaning – What things must “I” do to see that “R.”
I’m in the advertising business. I help small and mid-sized businesses to execute highly profitable ad campaigns. These are paid ad campaigns on platforms like Google Ads and various social media. Therefore, the investment to be made to see a return on those campaigns is money. It’s the old saying, “You have to spend money to make money.” Of course there is more involved than simply throwing money at ad campaigns to make them profitable. There’s a lot of strategy and skill involved, which is precisely why my clients hire me.
With that said, I’m always amazed when I speak with business owners and entrepreneurs by how focused they are on the R and not on the I. My clients do take a big step when they hire me and decide it’s worth investing their precious dollars on advertising. They place their trust in me and I take that obligation very seriously! Making the decision to advertise is the first step in making that investment. However, I’ve noticed that most first-time advertisers are far too focused on the return and not on what it takes to generate it.
I’ve written before on the subject of making paid ad campaigns profitable. It’s all about the math. You spend a certain amount of money, execute a campaign in a certain way, and produce a strong multiple of that initial investment by design (such as that impressive 500% return my agency produces). But I don’t want to concentrate this newsletter on the math. This is more about the mindset and getting past the obstacles we place in front of ourselves to be successful in business.
What investments must I make in order to see a return in my business?
For my advertising clients, that investment comes down to hiring me and not being afraid to invest dollars in their campaigns. I don’t advise my clients to start their campaigns at high budgets, even when they have the money. It’s best to start off more moderately, craft a viable advertising strategy and then execute that, measure results, and then make improvements. Once a certain strategy is proven, then you scale it up and invest more money. Usually when I can demonstrate a strong return for my clients they are all too happy to increase their ad spends.
Back to that letter I…
Making an investment is not just about the money. There are many ways to invest in your desired outcome. I don’t want this to sound like the clichéd pep talk, but there is a point to make here. I speak with a LOT of entrepreneurs and business owners. Many of them are struggling to make it. They are far too often talking about their goals and desire to see a return, but not on what it takes to achieve them.
Ok, let’s invoke a cheesy line from the movie Over the Top (the arm wrestling movie with Sylvester Stallone):
The world meets nobody halfway. If you want it, you gotta take it.
As I read this, it sounds a little aggressive, doesn’t it? But I’m quoting this for a reason… it really is true. Things simply do not happen on their own. You have to make them happen! Look at me for example. I’m the owner of an ad agency and a soon-to-launch global digital marketplace. But I didn’t get here over night. Prior to these ventures I had 4 earlier businesses, and let me tell you, I invested heavily in each of those with my time, energy, and money. My ad agency (Adqua) was originally conceived to help fund my larger venture (iazo). Now that is making an investment! I started a business just to help make my other business possible.
Again ask yourself, what investments do I need to make in order to achieve my goals?
Spending money to make money is important (especially when running ads). But what about everything else? Invest your time, your hard work, build a team, do the research, make prudent decisions, measure results, make better decisions, forge connections with smart people, etc, etc, etc.
This may be an anecdotal argument, but I feel compelled to make it today. Perhaps this is because of all those struggling business owners I speak with day to day. I’m often telling them not to rely solely on my advertising skills to make their businesses successful. To quote myself, “don’t just rely on the inbound marketing I do; start doing outbound marketing, make calls, write emails, knock on doors, and reach out to your target customers.”
So the next time you’re talking about generating a ROI, shift your thinking to the I, the investment and what you (I) must do to make it happen!
Want me to help with your advertising and marketing?
Please setup a free consultation at Adqua or email me at Michael@adqua.com