09-08-2020
Reaching Prospects with Advertising Media - The ROI Game
John Wanamaker, one of the marketing greats, famously said: “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.” While this was understandable a century ago, when it was first said, it should be a crime to say that today. Yet, the reality is that most small businesses do little if any tracking of advertising. Not measuring where your leads and sales come from and not tracking ROI on ad spend is the mark of an amateur. We all have at our disposal the technology to quickly, easily and cheaply track advertising effectiveness. Tools such as toll free numbers, website analytics, and coupon codes make this trivial. Remember, what gets measured, gets managed. Be ruthless with your ad spend by cutting the losers and riding the winners. Obviously, to know what’s losing and what’s winning, you need to be tracking and measuring. This is vital because media is by far the most expensive component of your marketing spend. It’s the bridge that connects your offer to your target market. Whether you’re using traditional media like radio, TV and print or newer digital media like social, search engine optimization (SEO) and email marketing, you need to understand the idiosyncrasies of each. It’s well beyond the scope of this book to go into the technical details of each category and subcategory of media. However, I’d give you this piece of general advice: hire experts that specialize in whatever media you decide is right for your campaign—they’re worth their weight in gold. Don’t try to do it yourself, especially when it comes to the most expensive part of your marketing process. What you don’t know WILL hurt you. Whether you’re using online media like social, email or web, or offline media like direct mail, print or radio, each has its own idiosyncrasies and technicalities that you’re highly likely to mess up if you’re not experienced with it. It would be a tragedy to get the target market and offer right and then have your campaign flop because you messed up a technical detail in your media. I’m often asked questions like, “What’s a good response rate for direct mail?” or “What kind of open rate should I expect when doing email marketing?” The expectation is that I’ll give a numerical answer. Something like, “Expect a 2% response rate from direct mail” or “Expect a 20% open rate for email.” Usually, these kinds of questions come from well-meaning business owners who have yet to build their marketing infrastructure. My answer is always the same—it depends. Sometimes a 50% response rate is a disaster, and sometimes a 0.01% response rate is a massive success. Response rates will vary dramatically depending on factors such as how relevant the message is to the target market, how compelling the offer is and how you came about the list you’re marketing to. Instead of asking what a good response rate is, which is a nonsense question, they’re really asking, “How do I measure the success of my marketing campaign?” So, how do you measure the success of a marketing campaign? For the impatient, here’s the short answer: did the marketing campaign make you more money than it cost you? Another way of putting it is, what was the return on investment (ROI) on the marketing campaign? If it cost you more than you made (or will ever make) on this campaign, then it’s a failure. If it cost you less than the profits you made as result of the campaign, then it’s a success. Credits: 1-Page Marketing Plan. Subscribe / Follow this podcast. DM@digitalentrepreneur247 on Instagram. Download QuikMeet, do instant video conferences with your family, friends, and colleagues.
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