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Because the ad isn't going out to wider audience, it's less expensive - and affordable for many small businesses.
This is the beginning of micro-persuasion. Putting your marketing message in front of smaller, not larger audiences. But isn't bigger better? Well no, not always.
Think of that local gym. Marketing convention tells us that most local businesses don't get a lot of action from people that are more than a 10 minute drive away. There are certainly exceptions, but imagine if that local gym scraped enough cash together to take out a national ad during the Superbowl. It would be a waste of money, because 99. 9999999% of the people who saw it can't or won't become customers of that gym.
Pay per click advertising, like those ads on the right hand side when you do Google searches, can be a great micro-persuasion tool. One of my coaching clients practices a very specialized type of law here in Massachusetts. It is illegal for him to practice law across state lines. I am helping him target his pay per click campaign so that only people in Massachusetts who need his services will click. It's estimated that he'll get about 15 clicks a day. That's not a lot, but if he converts even 1% of those clicks into customers he will have more clients than he can handle in less than a year. And this is only a very small part of his marketing campaign.
For most small businesses good marketing needs to go smaller not larger. Small businesses shouldn't burn their money in a marketing incinerator by trying to market like Nike or McDonald's. While some general public marketing is OK, it should be the smallest part of your marketing effort.
Micro-persuasion in a pure form is marketing only to those who are interested in and can buy what you're selling. You might even create smaller sub-niches to get even more granular. Let's say that you own a local craft store. You might offer free classes in things like candle-making, scrap-booking, cake decorating. . . etc. Because you are a good marketer, you always capture the students' mailing address and email (if they want to give it). Now you have a list by interest. Whenever you run a sale on scrap-booking stuff - you send a personalized letter to each of your scrap-bookers and maybe a special coupon.
The more personal and tight that your marketing can become, the better.
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