Make Every Ad Dollar Accountable

By: Dan Kennedy on: April 15th, 2010 5 Comments

In my last post, we finished up our discussion on the different strategies to create profit improvement and I informed you that I was going to switch gears just a little and talk in detail about my favorite subject and strategy which I rely heavily on to insure the success of every business I own or have an interest in.

Of course that subject can be none other direct marketing.

I am a strong, enthusiastic advocate of direct marketing. For most businesses, small or large, direct marketing consistently delivers the best results for dollars spent. We need to begin with an understanding of direct marketing versus other types of advertising, promotion and marketing. Let’s talk first a little bit about the others.

There is institutional advertising. This type of advertising is often intentionally used by big corporations and blindly copied by smaller ones. It essentially says to consumers and/or to stockholders here we are, here’s who we are, here’s what we do and we’re nice guys but it never asks anybody to buy anything or to take any action. It’s image building.

Some examples you’re probably familiar with include the Goodyear Blimp flying over football games, the IBM TV commercial seen during the Sunday morning news programs and during some sports telecasts, most bank advertising, Time Magazine’s signs in airports, this is all pure institutional advertising.

Advertising agencies, consultants and the media love to sell you this type of advertising because there is no possible way to measure its effectiveness. Is it working? Is it paying for itself? Who knows?

The next slightly more sensible approach is what I call ‘Non-Measurable Response Advertising.’ This type of advertising is trying to sell something but is still basically unaccountable for its results. TV commercials for a particular brand of car fall into this category. The intent of those commercials is to get you interested enough in that car to go to the showroom but there’s really no way to tell how many people who came to the showrooms this week we’re influenced by those commercials.

Would they have come anyway as a result of the dealers own newspaper ads? Who knows? Many smaller businesses get trapped using this type of advertising. Appliance, record, clothing, department stores all run sales ads – here’s what’s on sale come on in. But they have no means of determining how many people came because of the ads versus how many might of come anyway or how many came from an ad in one media versus the same ad in another.

They can guess. They can take this weekend’s higher traffic less last weekend’s traffic and attribute the difference to the ads but it gets worse. They advertise the sale via the newspaper, two radio stations and flyers. How do you tell what works and what doesn’t? Again ad agencies and the media like to sell this type of advertising because it’s difficult for the advertiser to measure the results.

Another type of marketing is public relations and publicity. There are firms who you can retain to prepare press releases and articles about your products or services and your company and work at getting them placed at various media. These firms may also arrange interviews and talk show appearances. Although you can measure them by how much actual exposure they get for you it’s generally difficult to then measure how much business came from the exposure. Also in this category is the sponsorship of everything from a Little League team to an Indy 500 race car or a golf tournament.

All three of these types of marketing probably have some place in a business’s total marketing plan. It is my firm belief, however that these methods are grossly and deliberately oversold to clients by media and professionals because of their resistance to results measurement. It is also my opinion that most businesses, the owners of small businesses and the executives of large companies stupidly waste outrageous sums of money on these non-measurable marketing options.

I would much rather see money spent where the results can be definitively and accurately measured so the changes can be made to develop successful response levels for every dollar spent – to do that, you use direct marketing which we will get into in detail in tomorrow’s post.

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    ABOUT THE AUTHOR:

    Dan Kennedy is internationally recognized as the 'Millionaire Maker,' helping people in just about every category of business turn their ideas into fortunes. Dan's "No B.S." approach is refreshing amidst a world of small business marketing hype and enriches those who act on his advice. For more money-making marketing tips, tactics and strategies, go to www.GKIC.com

    5 Responses

    1. Charles Ra says:

      institutional advertising
      Non-Measurable Response Advertising
      public relations and publicity
      stupidly waste outrageous sums of money on these non-measurable marketing options.
      I would much rather see money spent where the results can be definitively and accurately measured so the changes can be made to develop successful response levels for every dollar spent –
      yes, Brian, I agree. direct marketing IS the fastest, low budget, targeted way to market and sell products n services.
      direct marketing biz is changing my way of thinking as well.

    2. If you wake someone up at 3:00 in the morning, and say “quick! tell me what this logo is and I’ll let you go back to sleep!” and you show them the apple computer logo or the Nike Swoosh, they will wake up and be able to tell you what it was, based on the fact that these companies spend many millions of dollars annually literally searing their image into your head.

      for the rest of us, that is not the right way to go. Dan’s teaching about how each marketing dollar must lead to a trackless result is the only way a business that actually cares about making money from each ad as opposed to winning advertising awards is the only way to go.

    3. Rob Anspach says:

      That warm and fuzzy, feel good logo might win awards, but that doesn’t mean it’s winning dollars! A logo doesn’t mean crap if it doesn’t compel people to buy from you.

    4. Charles Ra says:

      nice observation Rob
      A logo doesn’t mean crap if it doesn’t compel people to buy from you.
      direct response mindset

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