High Frequency Advertising

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The Biggest Waste in Advertising (a Case Study)

Shoppers Flow Downstream

Water FlowingJust as a river flows downhill from higher terrain, shoppers always flow from the smaller community to the larger.

Advertising in the bigger community to draw customers to your smaller community is as futile as trying to make the water in a river defy gravity.

Tom’s Letter

I was reminded of the effects of swimming against the current when I received this letter:

“I’ve owned a boat dealership for over 30 years. We are located 1.5 – 2.5 hours northwest of Chicago in an area of lakes where our best customers own a second home. How do I use radio to reach these people?Reed's Marine

A. They are primarily up here only on week-ends in the summer.

B. They live full-time in the greater Chicagoland area where radio advertising is too expensive for us.

C. We have local radio stations, but our customers can still tune in their favorite Chicago area stations.

Over the past few years, I’ve run a Reed’s Marine radio commercial three times a day, seven days a week from April thru August. I’ve used the two biggest stations in our county, so we are permeating our area. My hope was that I might be heard by my best prospects on a rare occasion, but I was primarily targeting all the people in my county who would eventually mention us when they come in contact with the tourist coming from Chicago on the week-ends.

Do you think “second-hand” radio advertising can have an actual effect … sort of like second-hand cigarette smoke?”

Tom Johnson, owner
Reed’s Marine

Second hand advertising?

Yes, it can have an amazing effect. Another name for it is “word of mouth.” It’s also known as your professional reputation, the sum of the experiences customers have had with you. An individual customer’s personal experience determines whether that individual customer will be a good source of word of mouth.

customer_evangelistsExceptional experiences turn shoppers into customer evangelists. These are people who can’t wait to rave to the world about your exceptional business. (Of course, give them a bad experience and they could just as easily become vigilante customers – also eager to tell the world about your business).

So whether you call it word of mouth or professional reputation, those personal experiences drive repeat business, referral business, and collectively drive first-time business. Yes, “second-hand radio advertising,” works. It’s also one of the requirements of business success.

But Tom actually asked two questions, didn’t he? The second, the unstated question, wasn’t about professional reputations, or customer experiences, or referral business.

Tom Wonders if He Can Make Customers Flow Uphill

He wants to know if his situation is different enough to justify advertising in Chicago.

It’s not.

Biggest Waste CalloutThe biggest waste of money in advertising happens when a business spends it’s budget, but didn’t invest enough to persuade anyone. Compare it to buying a ticket three-quarters of the way to Europe. You spent your money, but still didn’t arrive.

The first problem is the sheer size of the Chicago market. The number of people in Chicago who own homes in Delavan is going to be a tiny fraction of a tiny fraction of a tiny percentage of the population.

In order to reach that minuscule segment of the market, you’re forced to also address the rest of the Chicago audience. And Tom, you can’t afford enough repetition of your ad on Chicago radio stations to effectively persuade anyone.** Like the salmon using all of it’s physical resources swimming against the current, you’re going to expend your financial resources fighting the inclination of all of those radio listeners to shop in bigger communities.

There is a practical way, though, to pursue that tiny fraction of Chicago’s population.

Stop Using Mass Media

Start making personal contact with Chicago residents who own homes in Delavan. The good news is it’s easier, and less costly, to make that personal contact once they’ve already arrived.

  • In most communities you can find the names and addresses of all new homeowners at the courthouse (or wherever the deeds are recorded). These are highly-targeted potential customers. Consider a “Welcome to your new home” letter to those folks, and include a CD ROM of the e-book you offer on your web site: The Five Biggest Mistakes People Make When Buying A Boat. Perhaps you could make that letter a full package of “welcome” gifts. Be sure to keep testing different letters and keeping very careful records of your expenses and conversion rates. Whenever you determine that one works better, dump the old one.
  • Find locations that tourists frequently patronize… restaurants, gas stations, and local service businesses. Any possibilities for flyers? Display ads in those locations?
  • Find referral partners. Team up with other local businesses who’s reputations are as good as your own; non-competitors who share your customers. Exchange sales leads. Support one another, publicly and privately. Start with the realtors, motorcycle / ATV dealers, and sporting goods stores.
  • Consider a “boat out” on a weekday evening. Take some of your best-selling models out on the water and invite local folks (as well as any visitors in the area) to look and ride. Make it a party atmosphere. Tie in a local restaurant or caterer. Get some local artists to show off their work. Find some local musicians to perform. Most of those folks will participate for the publicity. Twist the arm of your Chaparral Boat representative to pick up any out-of-pocket costs.

These personal contact ideas are not replacements for your primary marketing plan, which will include local mass media. Any can be added to a good plan, however.

Reed’s Marine Strategy is Solid

Long term, twenty-one ads per week will be sufficient on most radio stations, provided that you’re targeting relational shoppers.

I’m assuming that your ads are customer focused.  You are personally involved in the writing of those ads, aren’t you? Please don’t leave it up to the local radio stations.

We already discussed the power of word of mouth. If your message isn’t worth repeating, it won’t be repeated.

A Few Additional Things to Consider

  • Maximize your local media impact with heavier schedules early in the season and heavier schedules on weekends throughout the season.
  • Purchase gift certificates for dinners, concert events, or movies. Offer them to your local radio stations as give-away items. “Be the 9th caller and win a family four-pack of movie tickets, courtesy of Reed’s Marine in Delavan.”
  • Consider billboards on the main roads into town. In some small communities, especially those with few roads into town, three or four boards can provide as much as a 100 showing.
  • Your web site is very well done. Crisp, clean, informative, and easy to navigate. I’d suggest that you add the free download of your e-book to the home page as well. (More companies should be following your lead in this area – its an excellent piece.)

Also consider making a link from your home page to the “Reed’s Marine Pledge To You” statement. You can’t go wrong telling customers what’s in it for them. Tell them early and often.

Most advertisers in a smaller communities can afford enough frequency in local newspaper or radio to persuade local shoppers to come do business. You’re already doing the things most businesses should be doing. Stick with your existing strategy, and when tempted to purchase advertising in Chicago, remember what happens to the Salmon. Don’t wear yourself out fighting the current.


 

* Please don’t confuse comments about marketers swimming against the current as a condemnation of any contrarian philosophy. Contrarians find opportunities in serving the existing needs of customers which other businesses are ignoring.

** There is one possible exception in which Chicago radio could pay off, but it’s a long shot.

Are there outdoor shows in the Chicago area sponsored by Chicago radio stations? Is the attendance at those shows such that you could justify your involvement?

Many of the stations will tie your involvement in the show to purchases of advertising packages. Your mission is to get the largest number of announcements with the financial investment they require. See if they’ll let you exchange prime time ads for overnight placement to increase frequency, then concentrate those between 4am – 6am, especially Friday and Saturday. Consider sponsoring Friday evening or Saturday traffic reports.

And remember, the primary value of this strategy is to get face-to-face with potential customers at the outdoor show. The radio schedule is the price of your participation.

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Twice A Year Is Recommended

Dentist Sign

Dentist Sign

We assume that people avoid seeing their dentist because they fear pain. Perhaps that’s a valid assumption.

Maybe they don’t call because they don’t have a relationship with a dentist. Or maybe they’re just busy. Then again, maybe it’s lack of foresight – the “Nothing hurts. Why invite trouble?” attitude.

For the record, I’m feeling no discomfort. I’d like to think it was all that busy-ness that kept me away for the last dozen years. But, whatever the reason, for the first time in twelve years I made an appointment for a check up.

How did I choose the dentist?

Did I ask for referrals from people I know? Did I call the Chamber of Commerce? Search the Internet? Consult the yellow pages?

Nope. Like so many other people, I drive by his office every day. He has a sign out front of his office.

You’ve heard me say that frequency sells. Repeat the message often enough and people who need what you’re offering will eventually seek you out. By my own estimate I’ve passed that sign well over three hundred times. Three hundred impressions made their way into my brain. At the conscious level? Well, conscious enough that I did start thinking I was past due for a check-up.

One day, on a whim, I pulled into the parking lot and walked in. I had a delightful conversation with the doctor’s receptionist. She set my appointment, took insurance information, and explained the pricing and credit policies of her office.

On the appointed day I arrived, checked in, and got only half-way through the first article in an August 2004 issue of People, when I was called into the exam room.

Met the hygienist, Janine. Nice lady. She took a patient history, cleaned my teeth, and filled out a chart. She also took an x-ray of each side of my mouth. We spent about an hour and a quarter together.

Then the dentist walked in.

I said “Hi.”

He said “Hi,” back, but there was no enthusiasm in his voice. He made no eye contact. He went directly to the chart, and after studying for a minute, picked up a probe and a mirror and stuck them in my mouth.

He made two comments to Janine, wheeled his short naugahide covered stool out of my line of vision and announced “You need two fillings and we’re going to have to remove that rear molar. I’m going to have Janine take a full panoramic x-ray.”

With that, he was gone.

Janine escorted me across the hall, shot the panoramic x-ray, and told me I was finished.

I stopped at the reception desk to ask about my next appointment, which the receptionist scheduled within ten days.

I won’t be keeping the appointment.

I’ve already called and cancelled.

This Doctor of Dentistry could have turned me into a strong reference for his practice. All he would have had to do was to treat me as if I mattered.

Imagine the difference it would have made if he had spent thirty seconds when he first walked into the room to say “Good morning, Mr. McKay. We’re always glad to welcome new patients, and we’re pleased that you’ve chosen us for your dental care.”

Imagine how much better I’d feel at the beginning of the exam had he said “I’m going to take a look now at some areas Jeanine has marked on your chart. Would you mind opening your mouth?

Imagine how much more confidence I’d have in his prescription of treatment had he said “Mr. McKay, you have a couple of minor cavities that need to be filled, but that back molar is a ticking time bomb. If you’re not in any pain, yet, it’s only a matter of time. I’m sorry, but the decay is such that we’re not going to be able to save that tooth. I’d like to schedule a time to remove it. Is there any reason we shouldn’t do that?

But, those things will have to remain in my imagination, since they didn’t happen.

I’m one of those people who resents not being acknowledged. I don’t like it at a restaurant. I definately don’t like it when I’m paying a high priced professional for his services.

I’m presently taking steps to find a different dentist.

How much do you want to bet that the first doctor is still counting me as one of his patients? My patient file is probably one of the assets of his business.

And, though I did have the courtesy to cancel the appointment, I didn’t feel compelled to announce my departure from his practice. Maybe I’ll send him a copy of this article.

Three Lessons

So, while I begin the search for a second opinion, let me summarize what’s to be learned from this particular dental experience.

  • First, there is no amount of advertising as valuable as a good location.If enough people drive by, you won’t need to spend a dime promoting your business. We advertise to reach the people who don’t drive by.
  • Second, whether you pay large amounts in rent or large amounts for advertising, every customer / client / patient is already a major investment.DO NOT TREAT THEM AS IF THEY ARE INTERCHANGABLE. Make eye contact. Smile. Tell them how much you appreciate their business. People like to be appreciated.
  • And third, become very aware that the customer list you’ve paid so much to create (in rent or in advertising) is already outdated. You know people have tried you once and have decided not to repeat that experience.

How long should you wait for a customer to make a repeat purchase before you conclude that (s)he’s no longer a customer? One purchase cycle? Three? More?

Consumers today have more choice than ever before. One could argue that they are more valuable than ever before. The best way to be chosen is to be delightful.

What are you doing to delight them at first contact?  Maintaining attention and attraction are critical when you’re fishing for customers.

Your Guide,
Chuck McKay

Marketing consultant Chuck McKayYour Fishing for Customers guide, Chuck McKay, gets people to buy more of what you sell.

Got questions about whether your customer list reflects real customers (and how to get them all buying again)? Drop Chuck a note at ChuckMcKay@ChuckMcKayOnLine.com. Or call him at 304-208-7654.


 

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Is Bigger Really Better?

You’ve decided to run a series of newspaper ads, and the paper wants to know how much space to reserve for your ad. Is bigger always better?

In terms of increased readership, yes. But it also comes with an increase in cost.

You need to take both into account to calculate the return on your advertising investment.

(And in the interest of keeping this post to a reasonable length, we’ll put off the “optimum size” discussion for one more installment. Today we’ll limit the discussion to variables in ad size).

Depending on the section of the paper in which it’s placed, and depending on the demographic profile of the readers one is attempting to reach, the newspaper readership studies conducted by Daniel Starch And Company lead to some interesting conclusions as to size and placement of ads.

According to Starch, when all other factors are equal, it’s possible to cut the size of an ad in half and lose only 3% readership.1

Newspaper advertising is sold by the column inch. Ignoring contract discounts, and advertiser can buy a full-page, two half-pages, four quarter-pages, eight eighth-pages (you get the idea) all for roughly the same price.

As we pointed out in the last post repetition is a critical element in persuasion, and running an ad twice, or four times, or eight dramatically increases the frequency of shoppers noticing the ad.

A single full-page ad delivers a frequency of one. Eight eighth-page ads, assuming different pages or different days for each ad insertion, will deliver a frequency of approximately six. (See A Strategy For Frequency In Newspaper Advertising for a more complete explanation).

So, why is this not an easy decision? If frequency sells, why not always buy eight one-eighth page ads instead of a single full-page ad?

Because in order for an ad to “work” it must first be noticed. A full page ad is more likely to be noticed.

How much more?

A full-page ad is likely to be “noted” by 42% of the readers. An eighth-page by only 23%. The bigger the ad, the more people will see it.

 

But wait a minute. A full page only get’s “noted” 43% fo the time? Does this mean that no matter what size your ad, more than half the readership will never notice your ad?

Yes. Exactly.

And so what?

Let’s be honest, nothing being advertised appeals to everyone. People who are interested in what you have for sale are the readers likely to note, or to read your ad.

This is where it gets interesting. The number of people who see the ad is of lesser importance than the number of those people who, upon reading the ad, are motivated to buy from you.

With enough patience, and a good tracking system, you can actually measure the impact of different sizes of newspaper or magazine ads.

My good friend and restauranteur extraordinaire, Roger de la Paz, owner of Richie’s Real American Diner in Victorville, California, has that patience. He’s been keeping incredibly detailed records of the effect of his advertising since he opened Richie’s.

Roger tracks his newspaper ads with the simplest of measurements. He compares the demand for specific food items before the ad runs, and again afterward. He is then able to calculate the increased demand for specific menu items against the cost of the ads.

Over a three year period, Roger demonstrated that his most profitable ad size is two columns wide by three inches deep. Ads smaller than “two-by-three” had less impact on sales. Ads progressively larger than two-by-three did increase gross sales, but not enough to warrant the additional cost.


By carefully tracking the specifics of size, placement, and frequency of his newspaper advertising Roger is now able to predict to within a few dollars what Richie’s Real American Diner’s return on newspaper advertising investment will be.

By the way, he regularly tests the content of his ads, too.

Right now, Richie’s newspaper advertising delivers a consistantly predictable 118.06% increase in gross sales every day the ads run.

Next post we’ll definately reach some conclusions about the optimum ad size for top return on investment. Until then, are you keeping track of the effect of your ads?

Isn’t it time you started?


1 The reduction in noting scores from a quarter-page (26%) to an eighth-page (23%) is a difference of three percent when referenced to total readership. It is, however, a loss of nearly 12% of the number of people who notice the ad.

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A Strategy For Frequency In Newspaper Advertising

In most cases, a single exposure to an ad has very limited value. It takes a campaign of advertisements to effect shoppers, although truthfully this will vary slightly by medium.

For instance, a supermarket that buys two adjacent full page newspaper ads every Thursday to list all of the specially priced items that week, will in short time train Transactional shoppers to pick up every Thursday’s paper to scan the ad for bargains.

Large automobile dealers will also have some success attracting Transactional shoppers using this strategy. Unfortunately, as soon as their competitors start doing the same thing, the effectiveness of the ads becomes dependant not upon the size of ad, but upon the size of the loss leaders.

And this “list everything” strategy is virtually useless in attracting new Relational shoppers to your business.

So does that mean newspaper advertising is only valuable when the advertiser’s goal is Transactional (loss leader) business?

No. Not at all. It merely means that you need to take steps to increase the frequency of your ads. Why? Because sleep is the great eraser of short-term memory, which makes it the single biggest obsticle to advertising retention.

As we pointed out in How Many Ads Do I Need To Buy?, the evidence indicates that a minimum of three exposures to the ad in a seven day period is the minimum required to produce a positive return on investment.

Does this mean three ads a week will push your results into black ink?

Unfortunately, no.

Suppose your local daily newspaper has 20,000 readers per average day. That means 20,000 readers will scan the Monday paper. 20,000 will also scan the Tuesday paper. Not all of them will be the same 20,000 persons.

Perhaps 3,000 of Monday’s readers didn’t see the paper on Tuesday, but another 3,000 people who didn’t read Monday’s paper will pick up the paper on Tuesday. That means 17,000 people saw both papers.

If yet another 3,000 people didn’t pick up the paper Monday or Tuesday, but read Wednesday’s paper, it means 14,000 saw all three.

In actuality, the frequency build up in most papers is a bit quicker. In most newspapers across the U.S. it will take four ads within a single five day period for all of the average daily readers to be exposed an average of three times each.

Q: So, what’s the most effective way to purchase newspaper advertising?

A: Cut your ad size to one fourth and run it four times as often.

Next time we’ll discuss determining the optimum ad size to make this strategy deliver the best return on your newspaper advertising investment.

 

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Somebody Tell Lord Leverhulme

William Hesketh Lever

Lord Leverhulme: William Hesketh Lever

Half of my advertising is wasted, and the trouble is, I don’t know which half.” I’ve seen that quote attributed to a great number of people. My research indicates these words to have been first uttered by William Hesketh Lever (1821-1925), the 1st Lord Leverhulme. He was better known on this side of the pond as one of the original Lever Brothers.

Marketers today still wonder what he wondered.

Which Half is Wasted?

At the risk of sounding arrogant, I know.

Let me explain.

The seminal study of media usage was conducted by the legendary researcher Alfred Politz in February of 1966: The Politz Study Of New York Radio.

Politz studied the patterns of listening to the top ten radio stations in New York City. He detailed the number of people who listened to the radio for one quarter hour per week, the number who listen for two quarter hours per week, and so on, through the heaviest users. He then collapsed the listener distribution data into quintiles (equal fifths).

Until Politz published his study, media buyers only needed two basic figures: the number of people who tuned in at least once each week, (cume persons) and the number who were listening at any given point in time (average quarter hour persons). Fairly straight ahead math could then be used to calculate how long (Time Spent Listening) the average listener tuned in.

Why Basic Arithmetic Doesn’t Work To Measure Audiences

Before 1966 media buyers were satisfied to know that the average listener tuned in for, say, 20 hours per week. After the Poliz study we learned that the heaviest users, (the top 20%), will stick with their favorite station for a full 60 hours per week. At the other extreme the lightest quintile would listen for only 2 hours per week.

Within each quintile the average listening might look like:

60 hours
21 hours
11 hours
6 hours
2 hours
20 hour average

Other studies confirmed that consumers of other media were also not equal. This same pattern occurs in television viewing, reading of newspapers and magazines, and even the reading of outdoor signs. Each medium has very heavy consumption at the top quintile, which grows progressively lighter as each additional quintile enters the equation.

Politz made us aware that every single consumer was a different human being. Some were heavy users of media. Some not so much.

Effective Advertising Frequency

The next step in our understanding came in 1979 when Mike Naples authored Effective Frequency, The Relationship Between Frequency And Advertising Effectiveness.

In a project commissioned by the Association of National Advertisers, Naples evaluated the data from a number of existing studies of consumer behavior. He concluded that the first and second exposures to any ad were not effective in persuading a shopper to buy. Naples stated:

By and large, optimal exposure frequency appears to be at least three exposures within a purchase cycle.” He concluded “The central goal of productive media planning should be to place emphasis in enhancing frequency rather than reach.”

Media planners everywhere started combining Naples goal of three exposures with Politz audience distribution observations. The new Holy Grail (and 80’s media buzzword) became “Effective Frequency.”

Using the ratings services cume persons and quarter hour average persons, along with the math developed by Group W Radio from the Politz study, media buyers determined that there is an optimum number of exposures to an advertising message for each listening audience. *

How to Find That Optimum Advertising Level

Let’s explain the concept with a hypothetical radio station. Our hypothetical station has 111,800 cume persons listening each week, and 16,700 average persons of during during weekday prime time. These 111,800 people listen for an average of 5 hours per week. The optimum number of ads to reach this audience is 17 per week.

That schedule of 17 ads should reach 84,705 different listeners at least once. It will completely miss the remaining 27,095. Of those who do hear the ads, 21,646 of those listeners will hear only a single ad. 12,825 listeners will hear only 2 of them. Thus, the Effective Reach, the number of listeners who will hear 3 or more ads, will be 50,234, or roughly 40% of the cume. That makes sense. Here’s why.

Achieving an effective frequency of 3 with each of these five quintiles of listeners requires a schedule of:

First Quintile: 3 ads.
Second Quintile: 17 ads.
Third Quintile: 29 ads.
Fourth Quintile: 53 ads.
Fifth Quintile: 184 ads.

Let’s Start With the Bottom Quintile.

What do you pay per ad? How much would you have to pay for 184 ads per week? I’m willing to wager that you can’t afford a long term schedule of 184 exposures per week.

Perhaps you could stretch the budget enough to afford 53 ads. That’s a schedule which could motivate the fourth quintile. Congratulations. You’ve broadcast enough ads to persuade quintiles one, two, three, and four.

We Now Have Another Problem.

The first quintile only needed 3 ads to “get it.” Run 50 additional ads per week once they understand your message, and it’s highly probable that you’ll irritate those listeners. Annoy them this much and they’ll refuse to do business with you. Somewhere around ad number 17 they’ll split to some other radio station. **

Dogone it, you’re just never going to get them all. Customize your schedule for the heavy listeners and the light listeners will miss your ads. Plan to impact light listeners and you’ll repel heavy listeners. From one end or the other, you’re going to miss half.

Which Half Should We Attempt to Reach?

Wizard Of Ads ® Senior Partner Roy H. Williams suggests that on most radio stations 21 ads (plus or minus 2), each week will give you the greatest impact from the least number of dollars invested. You will effectively reach about half of that station’s audience.

Of course, you’re going to miss the other half of the station’s audience. There’s no way around it.

Question: On which of the listeners is the advertising “wasted?”
Answer: Any that won’t be exposed to our ad three or more times.

Somebody Tell Lord Leverhulme We Have His Answer.

We’re going to reach quintile one, quintile two, and about half of quintile three. We’re going to “waste” our ads on the other half of quintile three, and all of quintiles four and five.

However, some good news: the light users of one radio station tend to be the heavy users of another. And the average listener tunes into 3.6 stations per week. Find stations which share the same cume listeners, run 21 ads per week on each, and start getting spectacular results – assuming, of course, that your message is compelling and your offer is appealing.

Oh, and one final caveat. Depending upon the purchase cycle, as few as 2% of those people will be “in the market” on any given week. You’ll need to run this schedule next week to get the people who are ready to buy next week. You’ll need to run it the week after that to reach the people who are ready to buy that week. You’ll need to… well, you understand. You’ll need to run it every week that you intend to keep fishing for customers.

Your Guide,
Chuck McKay

Marketing consultant Chuck McKayYour Fishing for Customers guide, Chuck McKay, gets people to buy more of what you sell.

Got questions about your optimum advertising level? Drop Chuck a note at ChuckMcKay@ChuckMcKayOnLine.com. Or call him at 304-208-7654.

 


 

 

* All figures based on Radio’s New Math, © 1978 Group W Radio.


 

 

** Program Directors HATE ads which run in double digits daily. Of course, Program Directors also know that about the time the Disc Jockeys say that they’ll puke if that song plays again, the listeners are just learning the words. Through the nature of their jobs Disc Jockeys have long Times Spent Listening.

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