Online Advertising – does it work?

Interesting article in the Harvard Business Review regarding online advertising.

The article briefly summarises a working paper by Michael Luca of Harvard Business School on the subject of Reviews, Reputation and Revenue: The Case of


It shows how effective online advertising can be for the small or micro business. It does not however detail the time and effort that such advertising requires.

Obviously this is something that we are extremely interested in.

How deep must the pockets be?

The small business owner tends to have neither the time or budget to invest in marketing. Search Engine Optimisation, keywords and tags are the things that online directories do for them… at a premium.

Michael Luca’s study shows how effective online advertising can be at showing smaller businesses simply exist, especially in this instance, the restaurant industry.

I wonder how many times I have passed by a small side-street and not even noticed the 4 or 5 restaurants or cafes that might be hidden away.

The same analogy can be made for any number of local service related businesses, only they aren’t relying on you walking down a side-street to find them. These are the tradesmen & women that come to your house or apartment to fix, clean or service things.

Online advertising whilst accessible to all, tends to give the biggest benefit to those with the deepest pockets.

The full paper by Michael Luca can be found here: Harvard Business School – Michael Luca


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