A few years ago, advertising meant printing flyers, sending out mailers, filming TV and radio commercials, and buying newspaper ads. These days, the marketing landscape has changed drastically, but many companies are still following their old outdated processes.
If your advertising budget still looks the same as it did five years ago, it’s time for another look. What is the ROI (return on investment) of your current marketing methods? In other words, if you are spending $1000 a month on mailers, how much profit are you making off of those mailers? A lot of companies, especially smaller ones, aren’t even tracking these numbers.
Now days, you have Google Ad words, Angie’s List, Home Advisor, Thumbtack, and a whole slew of other lead providers and online lead generation companies. If you are going to efficiently spend those advertising dollars, you need to track your return. With so many options, your opportunity cost is equally as important as your ROI. If you are averaging $100 per lead with Angie’s List, and could be averaging $30 per lead with another company, you are missing out on that much business that you could be generating and not even know it.
When you are comparing advertising methods, the old school ways are generally the most expensive options that you can possibly buy. Another important metric is your CPI, or cost per impression. If you send out flyers in the spring, you have to pay to print the flyer, to mail them out, and for phone numbers to track incoming calls. Depending on the type of mailer you send, your cost per impression could be anywhere from fifty cents to two dollars or more, and you don’t even know if people are looking at your mailers or if your product applies to them.
Radio and TV commercials can be an effective way to quickly reach a large audience, but they are very costly. TV commercials are becoming less and less effective as people move to internet based TV services, and TV recording services like DVR where they can fast forward the commercials. The demographics of people that typically watch TV commercials are shifting to the older crowd, and they may or may not have a use for your service.
With so many people using the internet every day, online advertising has become extremely efficient. It is easy for companies like Google to target specific audiences that are relevant to your product, and the cost to do so is minimal. You can reach them instantly, you know whether or not they click on your ad, and you can track so many metrics it will make your head spin. With CPC (cost per click) as low as a couple of cents, nothing can complete with online advertising.
So the moral of the story? If you haven’t started moving your advertising budget to more web based products, you are behind in the game! It is still just as important to track your ROI and other important metrics, but with a little creativity and research, you could be bringing in a whole lot more clients with your same advertising budget.