How To Calculate True Value! (Written July, 1992)
When it comes to advertising, how do you calculate what you are truly getting for the money? How do you compare different advertising vehicles? One guy advertises he can run your 1” ad to 20,000 for only $30 and another guy advertises he can run your one-inch ad to 300,000 for $150. Your local papers can advertise a one-inch for $50 to 2 million. There are some magazines that can run your 8 x 11 flyer to 10,000 for $1,000 and some that can run your 8 x 11 flyer to 10,000 for $300. Which one is better? How do you make a realistic comparison? 2 million circulation sounds great! Is that the one you should go with? To be honest, nobody knows which one is better and neither will you until you do some testing. Not all advertising is the same!
The greatest myth is when someone tells you “all they did was mail out 1,000 flyers” or “all you have to do is run ads”. Imagine if it were that easy? We can only wish! Successful advertising promotions are based on consistency. I don’t know of any successful company who does not consistently have their message in front of our faces.
With this in mind, circulation is not the most important criteria you should go with when it comes to advertising. How many get circulated is one factor, but maybe how it is circulation might be the most important. For instance one guy might circulate your flyer or ad with 50 other flyers and ads, so would that be the same as circulating your flyer with only 5 ads or flyers? Obviously not. One guy may mail out your flyers or ads third class mail, yet another guy might mail out your flyers first class mail. One guy may mail to a broader group of people – one guy might mail to a specific targeted group of people. My point is that circulation certainly is enticing, but it is far from the most important factor. What would you pay more for? A specific targeted mailing of just your flyer, with one or two other offers mailed first class mail in a fancy looking envelope to 10,000 people or a broad mailing of 100 flyers including yours stapled together and mailed third class mail to 100,000? 100,000 sounds better than 10,000, but is it? I would probably guess that the targeted mailings with less offers is probably better for most, but who really knows? This is where testing comes into play!
Believe it or not, common sense is your greatest ally here. How do you make fair comparisons so you know which advertising vehicles you will get the most bang for your buck? What you need to do is spend the same amount of money with each advertiser to see which advertising medium is best for you. Too many of you advertise one time with one advertiser and sometimes you get good results, sometimes you don’t, but before you say anything good or anything bad about any advertiser, you need to know if your offer is good in the first place. By running the same ad with many different advertisers, you’ll be able to calculate exact results to see if indeed the offer is a good one and then to see which advertiser pulls in the best results for that specific offer. Not all offers are the same, but I’ll leave that for another time.
Let’s put this strategy into effect now. Let’s say you see 5 different advertisers and one advertises 100,000 and other 5,000 and yet another 1 million. Spend the same exact dollar amount with each one – for example $100 with one advertiser may get you 20,000 circulation, and $100 with another one may only get you 10,000. Send each advertiser the same ad and make sure you “key” them. Place the ads and wait to tabulate the results. It really doesn’t matter if one guy is advertising 10,000 circulation and another 100,000 – results are what count – so if one guy produces more response than another for equal amount of dollars spent, you have then just determined who’s advertising is better for that offer. This is how a legitimate comparison is made. Dollars spent – not circulation. You might find your advertising produces better results than you think when you do the same promotions with different advertisers. And by the way, if $100 is too expensive for you, then try $50 with each advertiser. The key is to send the same exact ad or flyer for the same exact dollars spent. Then tabulate your results. That is how simple it is to calculate true value!
The author of this article is Larry Costello, President of All-American Print & Mail, 2200 Wilson Blvd #102-57, Arlington, VA 22201.