Better Business Idea #10

Are You Throwing Away Your Advertising Dollars?

November 3, 1997

What results are you getting from your advertising? How do you know?

Many businesses use the advertising they see on television and in the newspaper from the large institutions as a model, such as an advertisement for a Jeep Cherokee. The problem with this institutional style of advertising is there is no way to determine how effective it is.

"What you can measure, you can manage." We have heard this bit of wisdom, but we often ignore it in designing our marketing strategies. If we can build a measurement system into our advertising, we can measure the results. We can test the advertising copy, the headline, etc. and make changes to determine what the results will be.

Once we have found a "model" that works, we can use it over and over again to get consistent results. You won't have to go to bed at night wondering where tomorrow's business will come from.

How can we do this?

By building a response into the ad. When the readers respond, we can count the number of responses versus the input, which could be the number of pieces mailed, advertising dollars, etc., to compute a response ratio. This type of advertising is called direct response advertising.

We can also build different types of response in an ad and measure the result for each type.

For example, an ad could offer a free report relating to your product or service and make available a recorded message (possibly customer or client testimonials) at a voice mail address the reader can call. Another direct response technique is to give a coupon for some benefit, which can then be counted when the customer redeems the coupon.

General Motors and Proctor and Gamble have advertising dollars to burn. You don't. Stop or significantly cut back institutional advertising and use direct response advertising.

Would you like some assistance in developing your direct response advertising? Please call Michael Gray at (408)918-3161 or email him at for an appointment to discuss your situation.

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Michael Gray, CPA
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