Marketing
EFFECTIVE
ADVERTISING

by Cynthia Dorrill

   Grow your business, attract new customers, develop long-term relationships with the customers who provide the greatest returns... these are the common goals of all businesses. But in this age of do not call lists, spam blockers and junk mail, many savvy businesspeople are returning to the days of mass marketing to promote their wares. In the transaction processing industry that generally means print advertising. We are asked numerous times a day for advice on how to create and measure effective print advertising campaigns, and thought perhaps the Transaction World audience at large could benefit from some of this shared knowledge.
   The old adage goes "...you get what you pay for". And with advertising dollars, that is largely true figuring out what you are paying for is the challenge! If it were easy to determine, we'd all be better off. However, the reality is, despite what media measurement companies may profess, it is difficult to calculate, to any degree of scientific certainty, or realistic accuracy, the true effectiveness of any print advertising campaign. Why are ad results so illusive we'll examine some of the reasons. But more importantly, we'll tell you how to create an effective and meaningful ad campaign for your business, to help you get the results you need!

Why Advertise?

   Well, this is the first question to tackle. Put quite simply, most companies need and want new sources of business. Especially in a highly competitive marketplace, finding and keeping customers is key. Effective, targeted advertising goes a long way towards creating a positive corporate image, to putting your company in the forefront of customers' minds and to becoming a regular fixture in the lives of potential buyers. Think of traditional consumer products the words "tissue" and "Kleenex" are virtually interchangeable, although one defines the product another the brand; how many people say "please hand me a first-aid strip," of course not, they say, "please hand me a Band-aid." These are simplistic examples of how companies successfully branded their products using advertising to create a lasting image in the minds of their potential customers. There are many more such examples and, even without the gigantic media budgets of consumer product companies, all companies can utilize print advertising to achieve positive branding results as well.

Evaluating Media

   Most media price their offerings based on circulation (or number of direct, individual subscribers) and quality of the medium (i.e. producing a 4-color publication costs, on average, 4 times as much as printing a black and white publication and so this is reflected in the media cost.) Secondary quality issues include quality of paper, delivery method - first class mailing vs bulk, etc. When evaluating a particular print vehicle, you can compare two similar quality publications by simply dividing the cost of the ad by the circulation this gives you the exact rate that you pay to reach each individual with your ad. It stands to reason that a publication with a circulation twice that of another, all other things equal, should cost more to advertise for the same size and color ad. Just as it would cost more to mail a 4-color postcard to 1000 people than a black and white card to 100 people. However, it also stands to reason that you will be reaching twice as many people and have twice as many potential buyers for your product or service. Savvy media buyers always conduct this simple math exercise before buying any type of advertising, because comparing the cost on one publication's rate card to the cost on that of another, tells you nothing about how many people you are reaching and your actual cost of reaching each. Maximizing your reach is really the true reason for mass print advertising in the first place.

Determining appropriateness of readership to your target

   Looking at simple circulation figures doesn't give you a clear picture of whether the medium reaches your target audience. Does one publication go to 1000 members of the same company? Well, this doesn't really give you much buying power for your ad dollar! It is important to know what types of people and companies actually read the publication to determine if this is the group to which you want to promote your products and services. Oftentimes the publications that we read as individuals are not the ones that our potential customers read, so making a media buying decision solely based on personal preference or familiarity is not always a wise investment of your ad dollars. Make sure that the people who are in a position to actually make a purchasing decision for your product, as well as the ones who engage in direct customer interaction, read the publication in which you advertise.

The Audit Report

   Which leads us to the audit report the circulation audit report that is. All reputable publications conduct, either annually, or every other year, a circulation audit. A true circulation audit is conducted by an outside third-party company that specializes in qualifying the circulation data for a publication. Audit companies examine the publication's subscription list, rank the quality of the list, conduct random sample mailings from the list and a number of other tests, to produce the audit report. This report serves the needs of both the publication and the media buyer. First, it substantiates for the publication that they do indeed have the circulation and reach the audience that they claim, and for the media buyer, it helps you see not only what types of companies the publication reaches, but the levels of people (by title), geographic distribution, number of distinct companies and other relevant information.
   Many publications report to reaching "x" number of individuals with their publication but in fact are reporting what is referred to as their "pass-around readership," not their actual circulation. Pass-around readership is the estimated number of individuals who read a certain copy of the magazine when left on a reception table, on the cross-town bus, on the treadmill at the gym, etc. Most publications have a pass-around rate of 2-4 readers per copy, and while interesting, these pass-around readers may or may not be in your target audience and may not be potential buyers for your product, so they do little to tell you of the potential effectiveness or cost of your ad campaign. And if they were that interested in reading the publication, they'd probably sign up for their own subscription and not wait for a copy to maybe be passed around in the first place. Be wary when you see reference to TOTAL READERS when the number is vastly different from the number listed on the circulation audit. Bottom line is - get the circulation audit, crunch some numbers, then buy your media.

Shelf Time

   This one is pretty self-explanatory do people read the publication and hold on to it, referring back to it for information, statistics, details, etc. or is it filed right away in the recycle bin? Shelf time, while also nearly impossible to measure, is best determined by the quality of the editorial in the publication. Think of popular magazines such as People Magazine, Fortune or The Economist. People may be entertaining, but generally after it is read, it is disposed of. While Fortune, The Economist and other publications with quality editorial are often seen on office credenzas, desks and nightstands, as they contain valuable business information and insight which people often need to review again and again. Shelf time, though also intangible, is important to weigh into the ad buying decision simply because an important componet of advertising is frequency. The number of times a person views your ad is directly proportional to the likelihood they will remember your company and do business with you in the future if your ad is in the publication with the shelf time, people will see it more often. Quality editorial drives shelf time so look for publications that are non-biased, that present newsworthy features, that discuss industry-related events and offer true value.

Media Reputation

   It is as true today as it was when your mother told you as a kid you are who your friends are. This translates into business as well. The reputation of your friends and partners reflects on you, as does the reputation of the media with which you associate your business. When considering whether to advertise in a particular publication, it is important to consider its general reputation. Do people actually read the magazine, do they learn from it, do they find value in its editorial? Do quality writers and experts contribute to the editorial to provide non-biased articles and features? These are all important to consider and evaluate. Survey those customers you trust and those with whom you'd like to partner in the future, and ask them their impressions of the various media vehicles in your space and then consider that they very well may view your company in the same way as they view the publications in which you advertise. Make quality friends and business partners. This translates to your media buying efforts as well.

Frequency

   We've talked about how to choose a media vehicle...so half the work is done. But now that you have chosen a vehicle and begun your advertising campaign, how do you know how many ads to run and how often? A lot depends on whether you are trying to sell one particular product, promote an event, or are embarking upon a campaign to create favorable brand equity and a steady stream of new customers for your product or company. All are different goals which require different media approaches for promoting one event, you will run ads prior to the event, for selling one piece of equipment, you will run the ad until the equipment is sold - similar to hiring a person to fill a specific job - those are easy.
   But to create positive brand equity, to help establish your company as a player in your industry, to derive demand for your products and services and to cultivate an ongoing new customer base, frequency is the key. Think of the TV ads that you remember many of us can sing the Toy's R Us theme song from the 1980s from memory..."I don't want to grow up..." and the reason why like the Energizer bunny commercials and the MasterCard "priceless" commercials, they were plastered across our television screens with alarming frequency. And they were successful because, even if you weren't in the market for a new toy and batteries to go with it when you saw the commercial, when you did, you knew where to go to get them, and knew to have your MasterCard with you to make the purchase. Frequency is just as key in print advertising in fact it's probably more important, because of the one-dimensional element of print advertising. So don't doom your campaign to failure by forgetting this key element if you have a limited budget, then run smaller ads, but run them as OFTEN as you can, to get the most return on your investment.

Measuring Results

   We've said, and we all know, that it's a tough call to measure overall ad effectiveness. And this is assuming you have done your homework, chosen the most appropriate media vehicle, created an effective ad (let's not forget that that is very key you can't expect people to become inspired to try your product or service from an uninspiring ad), and aligned the frequency of your program with your overall goals. How do you now tell if it was all worth it? Well, there's no magic answer here. And you should run just as quickly from any publication that guarantees a rate of return on your ad, as you would from a used car salesperson with an extended warranty agreement. You can track, to some degree, the number of people who call from your ad however, statistical reports show that ad recall is about as effective as the average person's ability to recall their grandparent's anniversary, the name of their first grade teacher or the PIN number on their very first debit card. In fact, there are anecdotal reports that over 50% of people report they saw a company's ad in a magazine in which that company never advertised so depending on caller recall is not very accurate. What we can assure you of, is if you follow the above steps, you have made a very informed and educated media purchase and stand as good a chance of success as any and most likely better chance than you would with any other means of mass marketing (buying lists, cold-calling randomly, yellow pages, direct mail, etc).

Finally, we leave you with the most common mistakes companies make in evaluating their media choices so that with the above information, you can avoid falling into the same traps.

Misassumptions about ad effectiveness
  • The "If we build it, they will come" mentality. This is perhaps the number one misassumption people make in business. If you build it.the next step is to tell as many potential customers what it does and how to get it! Product success doesn't arise from simple creation if customers don't know of its existence. A further mistake many companies make when then promoting their products and services, be it with a print ad, a flyer, or on tv or radio, is the expectation of immediate success. Sure we live in a society of immediate gratification, but it is unrealistic to believe that everyone who sees your ad will immediately, at that time, be interested, motivated and able to buy your product or service. This is where frequency and shelf life really come into play. If you have created in the mindset of your target audience that you have a viable product or service for their needs, when they are ready and able to purchase it, they will think of you. By advertising to them on a regular basis, you have created a memorable image of your company in their mind. If you have wisely chosen your ad medium and it is one that has an above average shelf life, potential buyers will be able to refer back to your ad, time and again, and have ready access to your product and contact information.
  • The "We don't need to advertise" myth - A dangerous one to fall victim to if your strategic business plan extends into the next fiscal year. The truth is, to stay alive, all businesses must actively and regularly, seek new sources of business, new audiences, new customers. This requires finding new and different methods of reaching these new potential customers. Certainly the best problem a company could have would be to have to dedicate additional resources to handling the overwhelming degree of new business walking in the door. Its been said that every job involves some degree of sales, and running every business involves some degree of advertising. Since you have to do it to survive, concentrate your efforts and view it as an investment in your company's future.
  • The "If it ain't broke, don't fix it" rut, also know as the "Oh we ran one ad one time in one publication and got two calls" box. Certainly, there are tried and true methods that work for everyone. And if all other conditions remained the same, these methods would always and forever be the best ones to use. However, that isn't the case. It is important to constantly track where your target audience is and where your next customer might originate - this requires trying new venues and taking calculated risks. By accurately evaluating media, as described above, it is possible to select those that provide you the greatest access to the most desirable targets, at the most effective rates.