Outside of the Internet, there are many advertising venues available to businesses, from print advertising, electronic media such as radio or television, magazine advertising, bill boards, grocery store register tape, direct mail, telemarketing… the list goes on and on.
Let’s look at each of these, the specific advantages and disadvantages that each possess, and how this affects your ability, as a business, to reach your intended market.
1. Print advertising, such as newspapers or ad mailers allow you to target a specific geographic region. One of the big disadvantages of newspaper advertising is that you cannot target the specific demographic you are trying to reach, just a general geographic area. As well, your advertisement is buried in the paper with the rest of the advertisers, not guaranteeing that your message is will even be seen by the intended target audience. The primary disadvantage is that newspaper readership is drastically down from what it was in the past, with the majority of people under the age of 50 getting their news from the internet and television news media.
Ad mailers, such as the little blue envelopes, are advertising services provided by third party direct mail companies, which allow you to target more specific regions within a general geographic area, usually by zip code or postal route, which does allow a more targeted ad than a newspaper, but also results in a large number of your advertisements being placed in the hands of people who were never your potential customers.
Add to the above mentioned shortcomings of print media the costs of graphic design, the fact that your ad exposure is limited to a fairly narrow geographic region, and that you have no ability to specifically target your ideal prospective customers, and it is easy to see that the majority of your advertising dollars are spent sending your message to the wrong people.
2. Television and radio advertising also have similar issues – production costs are prohibitive, as are air time costs, and unless your product has very broad appeal, most of the air time is wasted on people who were not even your prospective customers to begin with.
The main problem with any of the methods mentioned above is that they are only good for contacting “everybody”, and everybody is not your ideal customer. If you are a plumber, you want to reach home owners who are either looking to remodel, or living in older homes in need of maintenance type repairs. Apartment dwellers and other renters are not your customers and never will be, so why spend your hard earned dollars advertising to them?
3. Magazine advertising does allow for more targeted marketing, as there is a magazine published for just about any niche market you can imagine. There are local metropolitan and regional magazines, as well as magazines with national or global distribution. Full color advertising in a magazine can be extremely expensive, however, with a full page ad running into the tens of thousands of dollars, depending on the popularity and distribution of the publication. There are also very stringent requirements for graphic design, and very long lead times between when the ad copy and photo ready graphics have to be submitted, and when the magazine hits the news stands (typically 3 to 6 months). Some magazines do offer much more reasonably priced classified advertising sections, but in all honesty, how many people actually read them?
Magazine advertising can certainly be effective, in spite of the cost, mainly because of the ability to target the people who have an interest in the specific niche the magazine caters to.
4. Bill boards, and grocery store advertising, much like newspapers or television advertising, provide a way to deliver your message to a broad spectrum of people in a local geographical area. If you are a local business providing a service with broad appeal, or a restaurant trying to distribute a coupon to as many people as possible, then these advertising mediums may work fine for you, but are restricted to a small local region only. There is no ability to reach a larger audience, or to target the specific people who would be your ideal customer.
5. Direct mail can be very effective, but it can also be very expensive and risky if not done correctly. With direct mail you can target a specific demographic, such as dog owners over 35 who make over $40,000 a year. Direct mail also provides the ability to deliver your message to any size geographic region, from specific neighborhoods, cities, or even nationally. Historically, a good response rate to direct mail advertising, even to a specifically targeted market place, is about 1 in 1000, or 0.1%. A simple mailer with a couple of pages will cost you about $0.50 each, including printing and postage, so your cost per acquisition is roughly $500.00. Fine if you are selling investment services, but not so fine if you are selling a $29.00 widget.
6. The final method I want to look at is telemarketing. I understand that telemarketing has been stigmatized, much like used car salesmen, but I still believe that it is the simplest and most cost effective way to reach the maximum number of prospective customers possible. Why do I say this? Well, much like direct mail, telemarketing can target specific demographics within your target market, and can easily be done on a national level. Let’s assume that the typical caller can dial the phone 40 times an hour, and that they actually talk to someone for 1 in 10 numbers they dial, with the average conversation being 2 or 3 minutes. I am being conservative with these figures, because most telemarketers can actually dial quite a lot more calls in an hour, especially with some of the technology that is available, and the contact rate is typically higher than 1 in 10. However, based on my conservative example above, if you pay the telemarketer $12.00 per hour, your cost to successfully contact your target prospect with your advertising message is about $6.00, including payroll taxes. Additional costs, such as telephone equipment and office space have to be figured in as well, but this example gives you a starting place for comparison.
Depending on the product or service you are providing, the effectiveness and affordability of a telemarketing campaign can be even further increased by contracting the services of a professional telemarketing company. Outsourcing your telemarketing eliminates the cost of office space, telephone equipment, computer equipment and software, management costs, employee training, and if the service is contracted on a pay per performance or pay per lead basis, you even eliminate the hourly cost of employees, and only pay for successfully contacted qualified prospects.
Telemarketing is a great means of marketing for many types of businesses, such as contractors, insurance agencies, service businesses, and other businesses whose products or services are ideally suited for a very narrow niche in the marketplace. Your message can be delivered to the specific people who are most likely to need your service, and at a very cost effective rate. Not to mention that somebody other than you or your employees is getting the rejections and rude people on the phone, keeping morale up in your company, and leaving you free to focus on the day to day operations of your business.