In fact, Word-of-Mouth (WOM) advertising is the most valuable kind of advertising, and it doesn’t cost a cent. That said, there are companies that spend millions in PR and social marketing trying to generate it. They have to, because bad word-of-mouth will kill a bad product or even the company that makes it. Think about the last movie campaign you saw. Previews in the theaters. Ads on TV. But if your best bud Ben says the movie sucked, you’ll avoid it like the plague. Hence movies can do millions on the first weekend and die the next.
Mom and pop businesses generally don’t have millions to spend on those kinds of campaigns, so they just struggle along providing good products, outstanding service, and great customer care. That’s how they generate word of mouth, and that’s a good thing. But they need more. They need basic, tell-prospective-customers-you-exist advertising. An invitation to the party if you will. If you don’t invite people to come, there won’t be any mouths to say a good word for you.
Which brings me back to the question of when is free advertising worthless. And to some people the answer can be “always.” Never and Always? How can that be? The answer is perception. Whenever a merchant thinks advertising is worthless, it is. Perception is reality.
Old Pasadena Management District (OPMD) offers its merchants thousands of dollars in advertising exposure for free. Not only does OPMD hold regular events to bring customers into the district, they send out newsletters and flyers informing merchants of what is happening, when it is happening, where it is happening, and even how they can benefit from it. But they don’t stop there. OPMD has a website that attracts tens of thousands of visitors, and our merchants are listed on the site for free. They can describe their business, their hours, their directions, their specials, and a link to their OWN website, for Free! Even if they don’t have a website of their own, OPMD will give them a page which can display their logo and photos of their businesses. Did I mention it was for free?
So why would anyone in their right mind ignore thousands of dollars worth of free advertising? More than likely, it is exactly because it’s free. Free has no worth. It takes time and trouble to send in information, take pictures, create special offers, write down hours, and why take valuable time for something that has no worth. They don’t see any reason to use it, and probably never will use it.
A case in point of perception. Last year, OPMD reacted to the depressed economy and drop in charitable donations with a first ever Restaurant Week Event. All of the participating restaurants were asked to create Restaurant Week specials, post their menus on the OPMD site for free, and feature the free Restaurant Week Posters in their windows and the “Special” menus at their entrances and on their tables. Those that did saw immediate increases in business. Business at Le Grand Orange and Elements Café nearly doubled! However, there were participating restaurants that failed to create specials, didn’t post their menus online or feature the menus or posters in their establishments. Most of them saw a drop in business. Go figure.
I think the perception of “free” as “worthless” did them in. However, this year our track record of success may well change that perception, and I fully expect participants will take note of what worked and what didn’t. Actually their perception of “free advertising” may not change, but the “simple equation for a profitable outcome” will certainly override any misgivings they might have.
So, in retrospect, maybe the answer to the question, “When is free advertising worthless,” is: whenever you don’t take advantage of it.
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