Anyone who’s read a business book or gone to college should know ROI is a number derived from a simple mathematical formula.
I’ve been told by older reps how sweet it was to sell Yellow Page advertising “back in the day” (that being when phone companies had a monopoly on Yellow Pages). They tell me the typical sales pitch went something like this:
I’m here to sell you Yellow Page advertising. Oh, you’re not interested? Well, you will be. Here’s my card; call me when you change your mind. Oh… and the book’s closing in 2 weeks.
That’s how first half of their day was spent. The second half usually involved golf…
I just read an interesting analysis [pdf] of the “Get a Mac” ad campaign… you know, the ones with the nerdy businessman (“I’m a PC”) and the cool hipster (“I’m a Mac”) politely bantering about which is superior.
The long-running commercials have won advertising awards, been praised by Mac users, denegrated by PC loyalists, and parodied numerous times on sites like YouTube. There’s even a website where you can watch all 60+ commercials.
But the ultimate success of any advertising campaign is, How much did it affect sales? Here are the results:
As the image above illustrates, consumer behavior towards any particular medium is what makes it a valuable advertising channel. For newspaper and magazines, it’s the number of people who have subscribed to the publication. For outdoor advertising, it’s the number of cars driving past a particular location each day. For television and radio, it’s their ratings. For a website, it’s the number of visits, or unique visits, each month.
Yellow Pages are no different. Yellow Page publishers create directories with useful content in order to get consumers to use it. The more people who use the directory, the better it is for its advertisers. Why advertise in a book that only 5 percent of shoppers use, verses one that 30, 50, or even 75 percent use?
Yet, there is one critical difference that distinguishes Yellow Pages from nearly all other forms of advertising.
It’s become an online hobby for many marketing “gurus” to diparage Yellow Pages as “antiquated” and “obsolete.” They say things like, “Who uses the Yellow Pages anymore, anyway?” or they criticize the research studies yet never provide any data of their own to prove their point.
In reality, all studies are done by independent media firms (much like the Nielsen ratings do with television). So in the interest of the truth, I present to you a joint study, conducted by two such firms, Burke and comScore, which found the following about Yellow Page usage:
I’m conducting sales training all week, and one of my students showed me this video:
The Jerk came out in 1979. Since then, however, people have become skeptical about how effective Yellow Page advertising really is:
Sales and marketing gurus are always talking about value — that in order to have a successful product or service, we must “create value” for the customer. But what exactly does that mean?
While the theory is absolutely correct, the concept of value is subjective and nebulous. What is valuable to one person may be completely irrelevant to another.
Over the years, I’ve participated in a number of online forums, where business owners gather to discuss various issues that affect them. On one such forum, someone who had just started a carpet cleaning business posted this question: “What’s the best way to get new business?” The answers that followed were typical, if not predictable:
- The web designer said, “Get a website.”
- The direct mail guy said, “Send out some postcards.”
- The newspaper guy said, “Take out a classified ad.”
- The promotional items guy said, “Get some pens and fridge magnets made.”
- The yellow pages guy said, “Take out an ad in the Yellow Pages.”
And on it went…
Instead of searching for the one “magic bullet,” think of your advertising mix as a “team.” By adding members to the team, you can accomplish more than just one member could by himself. This is the best way to improve the response you get from your marketing.
Everyone in business want to decrease their costs, so here are three sure-fire ways to reduce your advertising costs:
- Increase your close ratio
- Increase your response rate
- Decrease your cost per month
If you are doing any sort of advertising then each month, year or whenever it’s time for the next campaign, you are faced with a choice: continue with what you were doing, increase your advertising, or decrease/cut your advertising. When it comes to reducing costs, most people naturally focus on the actual cost of the thing, but you don’t cancel your phone service simply because your telecom costs are too high. You might consider a reduced service plan, but not without taking into account exactly how that might negatively affect your business, right?
Advertising is no different. The goal of marketing is to get responses and ultimately sales. So you cannot look at your advertising costs outside of the context of: (1) What your current advertising produces in terms of responses and sales, and (2) What the potential negative effects of reducing that advertising would be.
Most people decide to cut advertising because they believe or perceive that it’s not working. Assuming that’s not the case with you, here’s how to make the most from your advertising dollars.
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Thanks for visiting. I’m a Marketing Evangelist, Blogger and Sales Trainer.
I get excited about geek stuff. But I’m also passionate about helping people and companies reach their fullest potential and becoming wildly successful.
That’s why I love helping businesses figure out how to market (especially web marketing) and why I train sales people to be the best they can be at what they do.