All too often I hear “I spent $XXX on advertising and got no results to show for it” from small business owners or Internet entrepreneurs who can ill afford to throw $XXX down the drain. You can avoid landing in that position by following one rule: Never, never, never pay for advertising simply because it seemed like a good idea at the time.

Scenario A: Someone comes across your path and asks if you'd like to advertise in venue XYZ. It could be for a web banner, an ezine, a print magazine, an event program or a cable TV spot. The salesperson tells you the number of readers, viewers or listeners, and you think, "Hmm, if just one percent of those respond..." You pay, and the ad brings you nothing but more salespeople.

Scenario B: You have a favorite magazine, web site, event or newsletter, and while looking at ads there, the thought pops into your head, "Hey, why don't I advertise here?" It feels like the right thing to do, so you follow your gut. Again, results fail to follow.

How You Should Decide on Advertising

Instead of buying advertising on impulse, use these four steps to decide where to place ads, to give yourself the best possible odds for success.

Step 1. Define your audience. Who are the people who are most likely to be interested in what you offer, have the money to spend and be willing and able to spend it on your product or service? Identify prospects in terms of profession, age, income, years in business, special interests, gender, etc.

For example, your healthy eating reminder service might be of greatest interest to businesspeople (male or female) age 30+ who travel often and mothers age 30-50 who work outside the home.

Step 2. Find advertising venues that seem to match your target market. If they offer a profile of their readership, great! Read it carefully. Also take a hard look at the ads running there. If you're promoting a $797 seminar and all you see is ads for items $20 or less, this is a no-go. Even if you're planning to advertise a zero-cost preview for the $797, this remains a no-go. On the other hand, if you see ads for cars, resorts, executive coaches and other items $1,000 or more, that's a good sign.

In this step, you're looking for confirmation that a possible place to advertise matches your profile, including people's willingness and ability to spend.

Step 3. If Step 2 gave you a green light, look for evidence that advertisers similar to you are making money from their ads at the venue you're considering. For magazines, the traditional rule of thumb is, if you see someone running the same ad four months in a row, it's safe to assume it's profitable for them. Online, the same ad running for at least three weeks is undoubtedly making money for the advertiser.

If you don't have the patience to watch for that long a time before making your decision, contact some of the advertisers and ask whether they're happy with the response they're getting advertising there. Sometimes you'll have a hard time reaching the person who knows that answer, and sometimes they won't share their results, but other times you'll receive honest feedback that helps you make your go/no go decision.

Step 4. Finally, before saying "yes," think about how you can incorporate some form of tracking in your ad to keep tabs on how well it's working. Tracking might consist of a coupon code, a special phone number or extension to call, a specific landing page on your web site for the ad, or automated tracking links. That way, you'll be in a position to keep spending if the ad works or to pull the plug if it does not.

Consider also, before you plunk down your money, whether you should be advertising at all or instead spending your time and resources on other forms of marketing. Too often I've seen people decide to place ads mainly out of the frustration of not having a marketing plan and not being able to think of any other way to drum up customers. Perhaps article marketing, sending out press releases, pursuing joint venture partners or running free lead-generating teleclasses would be far more fruitful.

Above all, think before you spend!