PT Barnum famously once said that he knew half of his advertising wasn’t working, he just didn’t know which half. With some kinds of advertising – such as awareness building advertising, wasting half of your advertising budget is a fact of life. Although this situation may be inevitable for large scale advertisers, it is entirely unnecessary for small business advertising. To be successful, you’ve got to play to your strengths, not your weaknesses. For small businesses this means making every dollar of your small ad budget count. Let’s look at how this is done.
PT Barnum knew that half his advertising wasn’t working.
Direct response advertising
Direct response marketing and advertising contains a strong call to action and is designed to generate an immediate response from consumers. Each sale, or other desired response, can be tracked and attributed to the ad that the person is responding to. Tracking the responses to each ad is fairly easy to implement – it just involves putting a tracking mechanism in place. When the desired response is by phone, use unique tracking phone numbers to properly attribute each response to the appropriate ad. When the response is on the Internet, use analytics and campaign tracking to identify which ads are responsible for bringing in the responses. Tracking responses to on-line advertising is very easy with the sophisticated software that is now available for the small business market. Tracking responses to off-line advertising is not hard, once you know the basics about how to do it. Read 3 ways to measure advertising responses off-line to see how this is done.
ROI for each ad
Since each response to your ads can be tracked with direct response style marketing, you can know with certainty exactly what the return on your advertising investment (ROI) really is. Instead of knowing or suspecting that some of your advertising budget is wasted; imagine knowing exactly what each ad was doing to help your business.
What is your cost per response for each ad? (Number of Responses / Cost of Ad = Cost per Response) This very simple calculation allows you to grade the effectiveness of your ads. Not only can you know which ads are bringing in the most leads or sales, you can know which ones are duds.
Split testing to increase ad response
Once you know exactly how each of your marketing efforts is performing you can take steps to improve your results. This is done by using split-test advertising to tweak your ads and boost your responses and then culling the underperforming ads.
What is the most effective advertising that money can buy? With direct response marketing, you’re never at a loss for the answer to that question. Imagine the impact on your business and on your bank account of knowing exactly which ads were bringing in the leads or sales.
