Advertising Information Ohio

HOME

DIRECTORY

 

More free ebooks online:
 
Advertising | Affiliate revenue sharing  |  Auctions  |  Blogging  |  Crafts & Hobbies  |  Currency Trading  |  Home Remedies and Best Tips |  Mesothelioma lung cancer and asbestos |  Mortgage and refinance |  Pets  |  Web Site design  |

We would like to thank the local libraries, schools, and universities for recommending students to visit us when doing research on any of our information topics.
Please check back frequently as new topics are added and current topics are updated daily.

 

Place your TextLink AD here free

How To Tell If An Advertisement Costs Too Much


People say it all the time: "This advertising costs too much!" They practically go into cardiac arrest when they see how much the advertising for certain media in certain markets is going to cost them. It is pretty easy to get sticker shock when you see that a sixty-second radio commercial on a popular Los Angeles station could cost you a thousand bucks. Each. Or when you realize that all the "Dot.com" businesses in Silicon Valley have made radio spots on top stations in the San Francisco market cost as much as $2,500. A Minute. Or when you realize that a newspaper ad in your city barely bigger than a Hershey Bar will cost a couple thousand dollars. It's easy to automatically think that's a lot of money. Now here's the important question for you, the advertiser: Does the ad actually cost too much?

So what's the answer? The savvy advertiser will tell you that the cost of the ad is not the issue. What's important is the return that the ad will bring. if you were charged even as much as $40,000 for a sixty-second radio commercial that generated enough sales to make you a profit of $50,000, then would the $40,000 be A LOT? The answer is NO! Of course not! You'd be a fool not to beg, borrow, or steal the $40,000 so you could make the $50,000 profit! Try getting that kind of return in the stock market!

How do you think that these big companies can afford to spend a million and a half dollars for a thirty second TV commercial during the Super Bowl? The know that an enormous amount of people will see it--enough to make the return on investment a good deal.

The point is simple; you've got to figure out how much money an ad will make you before you draw a conclusion of whether or not it costs too much. So how do you do that? It's actually pretty easy. Here's a simple process for determining the Return on Investment, or ROI, of an ad. First, you've got to know how much profit you make on each sale. For instance, if you buy it for $50 and sell it for $100, your gross profit is $50. Step two is to figure out what your closing ratio is. If, on average, you close one sale for every four people who inquire, that's a 25% closing ratio. If 9 out of 10 end up buying, then your closing ratio would be 90%. This is simple math.

Now, figure out what your break-even is. Do this by taking cost of the advertisement and divide it by the amount of gross profit per sale. Remember, we already figured out what your gross profit is a second ago. So how much do the ads costs? If the ads cost $1,000 and your average gross profit is $50, that means you've got to make 20 sales to make back the $1,000--that's your break-even point--in this example, it's 20 sales. Fourth and last, figure out the number of leads you need to generate from the ad if you are to break even. To do this, you've got to know your closing ratio, which we just figured out also. Let's say it's 25%, or in other words, you close one out of four people who inquire. So if you close 25%, and you need 20 sales to break even, that indicates that your $1,000 worth of advertising needs to generate 80 leads to break even.

Now I know that all sounds kind of complicated, but it's actually pretty simple. We just calculated in the example that if the $1,000 ads can generate 80 leads, you would break even. That's a return on investment of 0. I'm not saying that your goal is to break even. I realize that you are in business to make a profit. But let's start with breaking even; that's the bare minimum you can accept when running an ad. At least you didn't come up with a NEGATIVE return on investment!

So let's say your goal was to double your money? What would have to happen to your numbers? That's right, you'd have to double your lead flow, or in this case, generate 160 leads instead of just 80. That means that if you generated 160 leads, you would generate a profit of $1,000--again, on $1,000 spent. In other words, you've doubled your money. Your return on investment is 100%. That's pretty easy to follow, isn't it? By way of review, what we're trying to do is calculate your return on investment for your advertising. Here are the four steps again. Think about your numbers in your business.

What's your gross profit per sale?
What's your closing ratio?
What's your break even...in terms of number of sales needed?
How many leads does your ad need to generate for enough sales to break even?
What's your return on investment on any given number of leads that you generate?

Now realize something important here. What we've just done in this exercise is figure out how many leads you need to generate to break even on the cost of the advertisement, and then calculated the ROI for how many ever leads your ads end up generating. That's a good piece of information to have, but now I want to take it a step further. Let's figure out what's known as the Lifetime Value of a Customer. What if your average customer brings you a $50 gross profit per sale like in the example we just went through? Is that the only time that customer will ever buy anything from you? How many times does that average customer come back in the course of a month, or a year?

If your average customer shops with you one time a month and makes you $50 of gross profit every time, that customer is now worth $600 a year--in profit. And if you know that your average customer stays with you for 3 years, now that $50 a month client is worth a tidy $1800. So now how much would you be willing to spend to accrue that client? What if those were your average numbers, $50 a month for 3 years. Then in the example earlier, remember where we broke even with 80 leads and just 20 sales? Now those 20 customers would be worth an astounding $36,000 over the next three years. And it only cost you a thousand dollars worth of advertising. Now your break-even looks a lot better doesn't it! If you could accrue a $36,000 annuity every time you ran a thousand dollars' worth of ads, you should mortgage your house and spend as much money as possible on advertising!

Now, a couple of words of advice when figuring your return on investment for advertising. First, always estimate your numbers conservatively--or in other words, on the low side. Always figure on getting a lower number of leads than you're hoping for and expecting. Always count on a lower closing ratio than you're used to. If you calculate your numbers using conservative figures, then you'll do fine if your results are actually lower than projections...and in the event that you do as well as you had initially hoped, you'll just make more money than you expected.

Let me give you a real-life example to better illustrate ROI. There is a company who was promoting seminars where they would attempt to sell a service that cost $8,000. When they were starting to do advertising to promote these seminars, the question of how much budget should they allot came up. They wanted to start filling seminars with about a week after starting advertising, so they decided that fax broadcasting would be the best way for them to quickly get the message out about the seminars. Faxing can be done for as little as 7¢ per page in some major metropolitan areas, so they came back and said they thought they would want to send out about 25,000 faxes a week for the 5 weeks they would be doing seminars. When asked how many sales were they planning on generating, they said because of a unique financing plan that allowed them to sell their package on a low monthly payment basis, they thought they could sell at least 100 packages in that 5 week time period.

Well, 100 packages is a lot, and they were told that they would have to do at least 100,000 faxes a week for the 5-week period to get the number of leads required to sell that many packages. The man got his calculator out and did some quick math and realized that he had to spend $35,000! 7¢ times 100,000 faxes times 5 weeks! That number--$35,000--sounded so huge, it caught him off guard. His idea was to spend just under 2 grand a week, or a total of less than $9,000. Big difference. That's called "sticker shock."

So what he did was figure out the ROI, according to the steps previously explained. Again, first, figure out your gross profit per sale. His was about $3,250. Second, figure out the closing ratio. He thought his would be about 20%. So then, how many sales would he need to break even on a $35,000 advertising expenditure? Well, 35 thousand divided by $3,250 gross profit per sale is about 11 sales. Just 11 sales to break even. So if his closing ratio was just 10%, he'd have to generate about 110 leads to break even. 110 leads on 500,000 faxes?

Easily attainable. The last thing to do would be to figure out how many leads he'd have to get to reach his goal. His goal is 100 sales, and his closing ratio is 10%. That means he'd have to generate about 1,000 leads. On 500,000 faxes sent out, that's like a two-one-thousandths of a percent response. That is very reasonable. He'd generate a total gross profit on the deal of $325,000...and if you subtract out the $35,000 advertising cost, that's still a healthy gross profit. His attitude toward the $35 thousand changed instantly.

Well, do you see how that works now? Just run through your numbers and you'll know how much money is a lot of money when it comes to advertising.

Rich Harshaw is the founder of the Monopolize Your Marketplace system and CEO of Y2Marketing Business Marketing Strategies


Todays News by officejax free advertising and ad exchange solutionsMORE RESOURCES updated Thu. July / 19 / 2018

This RSS feed URL is deprecated
This RSS feed URL is deprecated, please update. New URLs can be found in the footers at https://news.google.com/news

Why Blockchain Could Be The Downfall Of YouTube Advertising - Forbes

Forbes

Why Blockchain Could Be The Downfall Of YouTube Advertising
Forbes
With recent announcements showing that teenagers are now watching an hour a day of YouTube, you might think that this is huge news for the advertising industry. A captive audience stuck between ad breaks should be every advertiser's dream yet instead, ...


Google's eight years of antitrust battles at the European Union - Livemint

Livemint

Google's eight years of antitrust battles at the European Union
Livemint
3 January 2013: The US Federal Trade Commission closes its 20-month antitrust probe of Google's search and advertising practices after the company pledges to change some practices. □ 1 February 2013: Almunia announces Google submitted a full offer ...
Android has created more choice, not less - Google BlogGoogle Blog

all 760 news articles »

IPG's #HaveHerBack Urges Women in Advertising to Continue Speaking Out on Harassment - Adweek

Adweek

IPG's #HaveHerBack Urges Women in Advertising to Continue Speaking Out on Harassment
Adweek
And because she spoke out prior to #MeToo gaining momentum in the advertising industry, she was forgotten. When she first saw #HaveHerBack encouraging women to speak out against sexual harassment post-#MeToo, Leone said, she contacted the ...


Sun Pacific partners with Premier Outdoor Media to expand advertising outreach - ROI-NJ.com

Sun Pacific partners with Premier Outdoor Media to expand advertising outreach
ROI-NJ.com
Street Smart Outdoor Corp., a wholly-owned subsidiary of Manalapan-based Sun Pacific Holding Corp., announced Tuesday it has partnered with Premier Outdoor Media to expand its advertising outreach program for its outdoor furniture portfolio in the ...


New advertising leader on board - Bolivar Herald-Free Press

Bolivar Herald-Free Press

New advertising leader on board
Bolivar Herald-Free Press
Earlier this decade, Honeycutt was advertising director and eventually publisher for newspapers in the Tulsa area that were under common ownership with the five papers he now joins. He and the advertising executives for the Missouri papers already know ...


Moen Launches New Advertising and Brand Campaign that Answers the Question - Who Designs for Water? - PR Newswire (press release)

Moen Launches New Advertising and Brand Campaign that Answers the Question - Who Designs for Water?
PR Newswire (press release)
Developed by Moen's agency of record, Havas Chicago, the campaign consists of advertising spots and digital content to connect the brand with consumers and present how Moen's smart, stylish products create beautiful and meaningful experiences with ...


Digital Media Solutions Acquires Digital Performance Advertising Network W4 - PR Newswire (press release)

Digital Media Solutions Acquires Digital Performance Advertising Network W4
PR Newswire (press release)
W4 helps advertisers acquire new customers while enabling digital media publishers to monetize traffic on a results-based, cost-per-action (CPA) basis. In addition to a robust technology platform created to manage, track and optimize online response ...

and more »

Aiming to make billboard advertising more programmatic, Adquick raises $2.1 million - TechCrunch

TechCrunch

Aiming to make billboard advertising more programmatic, Adquick raises $2.1 million
TechCrunch
What he was looking for, and what he eventually found in Adquick was a company that had managed to map all of the billboard advertising options available in the U.S. and was offering would-be advertisers a way to digitally distribute their ads and book ...


How do Marketing and Advertising Professionals Feel about the Rapidly Evolving Video Landscape? - MarTech Advisor

How do Marketing and Advertising Professionals Feel about the Rapidly Evolving Video Landscape?
MarTech Advisor
Today's video content landscape is rapidly evolving, and marketing and advertising professionals need to keep up. But how do they feel about the changes, and what effects are they seeing as a result? writes, David Mason, Co-founder and CEO, StudioNow.


Knoxville business owner still waiting for refund from advertising company - WATE 6 On Your Side

WATE 6 On Your Side

Knoxville business owner still waiting for refund from advertising company
WATE 6 On Your Side
KNOXVILLE, Tenn. (WATE) - A young business owner is wondering when she'll receive a refund from a unique advertising company. The New York-based business says it helps do everything from press releases, social media campaigns to radio podcasts.


Google News

              used office cubicle and partitions walls for sale in Northeast Ohio   free amv format video downloads   amv format video downloads   amv format videos

Find custom outdoor advertising supplies and business supplies in Akron, Ohio below wholesale at OfficeJax in Akron, Ohio

Auctions Akron, Ohio    Blogging Ohio    Rss Ohio    Crafts & Hobbies Akron Ohio    Currency Trading in Akron Ohio
   Mortgage and refinance   Pets Akron Ohio    Web Site designers in Akron Ohio   university of akron university housing available

roofing contractors Akron Ohio

Surplus Overstock and used PET SUPPLIES

Find unclaimed freight in Akron Ohio

[Back to Top]

Find used office equipment in Ohio at www.OfficeJax.Has.It

Find the best fleamarkets at www.FleaMarketWorld.Has.It

www.Akron.Has.It

Find electric powered vehicles at www.NoGas.Drives.It

Akron City directory

Free Automatic Link Exchange

Flea Market World

Anonymous and Confidential U.S. Mail Drops - No ID Required reship worldwide

Find homes for rent
in Akron Ohio
www.homes4rent.has.it

Fleamarket World
www.fleamarkets.tk

Jim (James) Baughman Hosting Company of Akron, Ohio offers the finest in the CLOUD internet hosting  service and solutions at affordable prices. The Hepsia control panel is a superior control panel unlike the old school cpanel you may be familiar with as well as downloadable daily backups, 24 hour tech support response time is less than 30 minutes, php version selection, unlimited bandwidth, are all included at no additional cost.

Click here to place your free classified AD's on this page for freeHere
 

officejax surplus office furniture outlet Akron, ohio

OfficeJax free ad space available here

auction news and listings for Akron, Ohio

Akron crafts and hobby news center

Akron currency trading

Akron Ohio pet news

Advertising and promotions Akron, Ohio

The Akron blogging news center

lung mesothelioma asbestos

Akron Ohio web site design news

Akron Mortgaging and refinancing

Best Home Remedies and Tips

HOME | Site Map
© 2012 - 2018 All Rights Reserved


  

advertising agency advertising supply and services marketing and advertising internet advertising pay per click advertising newspaper advertising promotion online advertising free advertising business marketing and advertising promotional advertising specialty print advertising banner advertising agency promotional product advertising radio advertising company classified advertising web advertising outdoor advertising ppc advertising advertising agency and services local advertising art layout production service advertising direct internet marketing advertising web site advertising business advertising television advertising jobs advertising services restaurant advertising yellow page advertising agency tv advertising web banner advertising directory advertising services  advertising slogan advertising photographer adsense advertising adwords apis cashing billboard advertising advertising balloon pay per click banner advertising gambling online magazine advertising yahoo advertising email advertising free internet advertising internet online marketing advertising business search engine advertising direct mail advertising services advertising design advertising age creative advertising targeted advertising advertising campaign media advertising career free online advertising mobile advertising ogilvy vintage advertising pen internet advertising agency car advertising subliminal advertising idea advertising and marketing employment cheap advertising pen advertising space  online advertising company advertising sign career in advertising direct mail advertising small business advertising history of advertising internet marketing online advertising advertising card communication content integrated marketing perspective premium promotion internet banner advertising advertising outdoor billboard affiliate advertising advertising art advertising display advertising product advertising copy advertising affiliate program free web site advertising real estate advertising brand advertising advertising brand communication guerrilla unconventional advertising business internet online internet marketing promotion advertising advertising firm contemporary advertising coroplast akron ohio custom signs and advertising solutions at OfficeJax online flea market