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Advertising as an Investment, By Ira Smolev

November 7, 2012

For individual businesses, purchasing advertising space (or airtime) can be calculated both as an expense and an investment. Because an initial cash payment is required to purchase ad space, and further money is needed to create the ad itself, advertising can seem like a costly proposition. The returns come as ads reach and win over new customers or bring returning customers back to a business.

More sophisticated business investors, however, can invest in advertising to yield even greater returns. Those with adequate capital can purchase advertising space and time beyond what they need for their own purposes (potentially at a discount, when the space is purchased in bulk) and then resell it to smaller businesses on an as-needed basis. In any space they don’t sell, investors can advertise their own goods and services, thus maximizing the potential return on their funds.

Alternately, companies can make large media purchases to make big-statement ads, as car company Maruti did with The Week magazine in 2003, buying every ad slot to promote a new car.

About Ira Smolev:
After a stint as a Systems Engineer with IBM, Ira Smolev branched into a variety of investments, including cable TV and print advertising. Mr. Smolev later expanded his investments to include real estate, import concerns, product development, and Internet ventures.

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