Do your ads generate more sales?
Philadelphia retailer and US Postmaster General John Wanamaker once said, “Half the money I spend on advertising is wasted; the problem is I don’t know which half.”
If you’re spending $10,000 a month on advertising, $5,000 is going straight down the tubes. That wastes $60,000 of your hard-earned cash every year. Money you could spend on better, more focused marketing.
Imagine if you could figure out which half works and spend only on that half. The good news is that you can. Everything will become clear in no time.
types of advertising
In the meantime, let me explain how advertising works.
Generally speaking, there are two types of advertising. One is Branding and Positioning (BAP) and the other is Direct Response (DR) advertising.
Branding and Advertising Positioning
Branding and Position focuses on getting the company’s name, service, or product continually in the minds of its customers. As you can imagine, this requires ongoing advertising activity and can cost a lot of money. Companies that do this type of advertising include British Airways, Nike and MacDonald’s.
These are all major companies and everyone already knows their name and what they stand for.
Why do they do it?
The simple answer is that they are in a highly competitive market. They want to retain their large market share by making sure that the most recent ad a potential customer remembers is for your service or product. So when they’re thirsty, it’s a Coke. If they’re hungry, it’s a Big Mac, if they want to fly, they choose the world’s favorite airline.
Imagine the mountains of money that go towards that goal. But imagine also the horror of the accountants: they don’t know which campaign is making a profit.
Earnings are the only thing that tells you if your campaign is working. If you know your ad is generating more revenue than it costs to create, run, and service it, you’ll keep running it, right?
Unfortunately, branding and positioning advertising (BAP) cannot be evaluated. You just don’t know if it’s worth doing or not. How do you know which ad ultimately persuaded your prospect to do business with you?
Interestingly, Bill Bernbach, one of the founders of modern advertising, said that “advertising doesn’t create a product advantage. It can only convey it.”
So why bother advertising BAP?
Probably because advertising agencies are happy to use BAP advertising for almost any business. Any slowdown in sales cannot be attributed to your ads. Any increase is claimed to prove that the ad is working.
You actually have no idea.
Former Canadian police officer turned fabulously paid copywriter John E. Kennedy coined the phrase “advertising is the art of selling in print.”
Would you tell a salesperson to go see a potential customer and remove customer-facing benefits from their presentation? Would you also tell them not to ask for the order? They would laugh at you and if you persisted you would probably go out of business and certainly lose your sellers.
BAP advertising does exactly that for your customer.
direct response advertising
In contrast, direct response (DR) advertising can directly link a specific advertisement to an increase in sales. Or alternatively, highlight a problematic ad that needs fixing.
This type of advertising seeks to inform the potential customer about how your product or service improves their life, corrects a bug or solves a problem. Also, DR advertising almost always asks for a response. Whether it’s to call to buy right away (rare), to get a free sample, free report, free coupon, free experience, or other intermediate step before purchasing the target product.
Imagine the calls, letters, and emails you can receive from advertising that encourages your prospects to take action to contact your company right away. You get to see if the campaign is working. That means you can step in and change it if it isn’t.
But it also allows you to test different aspects of your ad to try to increase response even further. So, for example, you could post two ads with the title changed to one, or a different offer to one, or a toll-free number versus a geographic number.
You can see how each word and image in your ad is performing. Don’t you feel better? You have control over your spending and the customers that are purchased for your advertising dollar.
Why don’t people always use the direct answer?
There are many people who would agree that DR advertising is the right way to advertise. But they still don’t.
Why?
Usually the reason is simply one of ego. Direct response ads aren’t usually pretty or win Cannes Advertising Lions awards. If you are the head of the company or the director of sales, imagine how tempting it is to run ads that could win prizes…
You already have sales coming in. Running a BAP ad will still generate sales. And you may win that Lion at the Cannes awards for best advertising.
You are kidding yourself if you think it is for any other reason. Because almost without exception, direct response ads will drive more sales than BAP ads.
However, many advertisers don’t realize it. They are convinced that an ad has to look “professional” to sell. WRONG!
Do you want more sales?
If it does, and I’m sure it does, use the following steps:
Step 1: Learn how your products engage with your users. What emotions, feelings and beliefs does it generate or speak?
Step 2: Evaluate the best way to convey that to your end user.
Step 3: Are the newspapers/magazines/radio/TV channels you’ve chosen to advertise on read by your preferred prospects?
Step 4: Verify and test each ad with a single entry in your chosen medium. (Do not run ad series until you have tested the pulling power)
Step 5 – Buy the smallest display ad possible. Then every time you make money, buy the next size up until you start losing money. Then go back to the last one that made money: the optimal size.
Step 6 – Continually Run Split Tests to Find the Best Pull Direct Response for Your Product
Step 7 – Use some of your saved advertising to buy other marketing media
internet to the rescue
There is no doubt that the Internet leans more towards direct response. You can easily perform split tests of web pages and web page components. You can see how many people are attracted to one offer compared to another and you can do it in near real time.
And yet there are still people who advertise Branding and Positioning, when it is not necessary.