How to identify your advertising winners
After placing your adverts and getting some business, it is wise to check how successful your advert has been. The key factor here is how much business you generate from every dollar spent on advertising.
Let’s take the example of Publication B above. Your $120 of advertising brings in $2,500 worth of business. The calculation of the return on your money is easy.
Use the following formula:
Return on $1 advertising spend = Total advert revenue/Advert cost
Therefore, our example indicates that for every pound spent on advertising in Publication B you receive $2,500/$120 = $20.83 in business.
As a rule of thumb, if you can bring in more than 2 – 3 times your initial outlay within 1 month of advertising, you have a winner. For example, if you spend $10 on an advert that brings in $20 in revenue within one month, this advert is worth running.
The reason it is a winner is that you will get repeat business long after when the advert was placed. This will then be all profit.
Rolling out big when you hit a winner – how to do it without risking your shirt
When you get a winning advert, role out big. Triple the number of magazines or papers where you advertise. Leave it a couple of weeks to check that the extra revenue generated is covering your extra advertising cost and that its not a freak result. If it remains successful, triple your advertising again. Keep doing this until you are fully booked.
If you start to run out of local areas to advertise, look at the surrounding areas if they are close enough. You don’t want to end up travelling miles if you can help it because you’ll eat up your time in a non-productive travelling. In other words, you can’t bill. Travelling some distance is not so much of a problem if you can charge extra high fees because it’s worth it. You may like to charge them for your travel and accommodation expenses too.
Another way to roll out big is to increase the size of your display or classified ad. The larger the ad, the larger the response (on average). However, doubling the ad size will not necessarily double your response. You have to test, test, test to see what happens. Commonly, if you have a display ad taking up half a page, the response from a full-page ad may be just an extra 50% and not an extra 100%.
Also, consider placing more ads in the same publications. Let’s say you had the following ad in the computer section of your local paper:
COMPUTER TRAINING available for home users. Learn Windows, Word, Excel and more. For details call 1-800-6655.
You could also create the following ads for the same section in the same paper:
COMPUTER HELP for local businesses. Get staff trained onsite at competitive rates. Learn MS Office, Internet and more. Call 1-800-6655.
TECHNICAL SUPPORT available on your computer related problems. Fast response guaranteed. Call 1-800-6655.
WEBSITES CREATED at rock bottom prices. Check out www.yoursite.com for sample of our work. Call 1-800-6655.
NETWORK SPECIALISTS ready to sort out your network problems or get you up and running. Fast response. Call 1-800-6655.
When readers are scanning though the classified (or display) ads, they will often just glance at the headlines (CAPITALS) to see if the advert is relevant to them. By covering many topics, you improve your chances of your ad being read and replied to. Also, each ad makes you look as if you are a specialist in that area. Don’t worry if they read your other ads as well. They may think you have different departments within your company that deals with each different area.
Warning: Do not advertise everywhere immediately after getting a good advert response because sometimes it is a freak result. Your ad then may not pull for the next 12 times you run that ad. The ad cost then swamps all your profits. It could have been a dog after all but you were misled by the freak response when you first placed that ad.
Always look at the averages over time and ignore major aberrations that will occur from time to time.