Few things are as uncertain to a new home business owner as where, when and how to buy advertising. If you've started to research your advertising options you are already painfully aware of the costs involved. Costs that can, literally, put you out of business if not controlled. Yet, without some form of regular, effective advertising your business can stagnate and starve to death. How do you know what is right for you? In this article we'll look at some options, and some ways to measure effectiveness, that should keep you in the money and out of trouble.
Will Your Customer's See Your Ad?
Advertising is sold based on its reach. If a newspaper, for instance, has a circulation of 100,000 subscribers, ad space will be considerably more expensive than a newspaper with a circulation of 10,000 subscribers. The first reaches ten times more people. Reach can be confusing, however, and it is more accurately an indicator of selling price to the publisher than anything else. As the buyer you must first consider how closely the demographic profile of the publication's readers matches that of your customer before you worry about the reach.
Demographic profile may seem like a complicated concept. In this case it simply means the "people" (demos=Greek for people) characteristics of that publication's subscribers. Their income, age, gender, and education levels to name a few of the common demographics measured. Most first class publications gather this information and make it available as part of their sales presentation. Smaller, or less professional publications may have incomplete, or even no, data. If you can't get, or determine, the demographics of a publication's readership its probably a good idea to pass on it as an advertising medium for your home business.
Cheap Isn't Necessarily Inexpensive
Often new home business owners see cheap advertising, especially in smaller publications like community newspapers, or association newsletters, and think its a good buy when compared to ad space in larger publications. While the two publications in question may look like apples and oranges, there is a way to convert the apples to oranges and make a reasonable comparison. Simply divide the cost of the advertisement by the total number of projected readers. This will give you a "cost per view" of your ad in each publication.
Here is a simple example of the conversion at work. The Daily - circulation 100,000 -offers you a business card size ad, for one week, at $1000. The Community Weekly - Circulation 5,000 - offers you the same size ad, for one issue, at $50. Which is least expensive?
If you divide the $1000 cost of The Daily's ad by 500,000 (thats 100,000 circulation times the 5 days it will run), you get a projected cost of $.002 per view. If you divide the Community Weekly's cost of $50 by the 5,000 circulation (the ad runs once - its a weekly) you get a cost of $.01 per view. The $50 ad is actually five times more expensive.
This is a hypothetical example, of course. There are many things to consider like the fit of the Community Weekly's demograhic compared to The Daily, and the fact that the Community Weekly will likely have a few more views than the initial 5,000 subscibers. That's because it will sit in a few waiting rooms until the next issue comes out, but this isn't usually enough to make a big change in the cost per view.
Tracking
The most essential tool in your analysis of ad price and effectiveness is tracking. The cost per view, and demographic match are crucial in making your initial decision to try a publication. The acid tests for continued advertising in any medium are cost per call, and cost per sale. Two important measures you can't get without running some test ads and carefully tracking the response rate for each advertisement you run.
There are many ways to track response rate. The ad can request that caller ask for a specific individual by name. When a call comes in for Mr. Bishop, for instance, you know they saw the advertisement in The Daily. You can ask that orders be directed to a specific department. When an order arrives addressed to "department CW100" for instance, you know that order came from your ad in the Community Weekly. A less exotic, but very effective method, is to simply ask each caller, "Where did you hear about us", and then enter the answer in your tracking software.
Once you have your tracking results use the same type of calculation you emplyed in determining the cost per view before you ran the advertisement to arrive at a cost per call and cost per sale. Divide the cost of the advertising by the number of calls it generated to get the cost per call. Divide the number of closed sales that originated with the ad by the cost to arrive at the cost per sale.
In the end, it is cost per sale that matters. No matter what the cost per view, or cost per call work out to be, your best advertising medium will always be the publication, radio staion, or TV station that provides the lowest cost per closed sale. You can't find that out, however, without running a test ad campaign and good tracking.
Jess Huffman is a Business Consultant and Coach working from his home office in Calgary, Alberta. Jess has helped hundreds of people successfully start their own work from home businesses.
http://www.home-business-and-entrepreneur-tools.com