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John Wanamaker, a 19th century entrepreneur, once famously made the statement, "I know that half of my advertising is wasted, I just don't know which half." Fortunately for today's marketers, there are scientific ways to determine which half is wasted, and which half is not, through the use of common direct marketing measurements.
Advertising is, and has always been, part art and part science. With direct marketing, the science part takes center stage as there are common direct marketing measurements that can be utilized to verify the results of the advertising.
With the increased popularity of direct marketing, the success of advertising can be measured through a variety of common direct marketing methods such as cost per acquisition, cost per piece, and response rate.
Before continuing in describing these common direct marketing measurements in detail, it is beneficial to review one of the direct marketing tools needed to determine the success of the mailing. The most important direct marketing tool is the response mechanism. This is how you can gauge the success, or lack of success, of a direct mail campaign. This is the mechanism by which the prospect will use to respond - it may be a postcard to request more information, an 800 number to call, or a website address to place an order. You can than utilize this response to determine the success of the direct mailing.
The first of the most common direct marketing measurements is the cost per acquisition. The cost per acquisition can be determined by taking the total cost of the mailing and dividing it by the number of responses. For example, let's say the total cost of a mailing is $2,000 and 20 people respond. The cost per acquisition is $100. This is an important tool to find out if the cost to obtain a new customer is in line with the profits that you will receive.
The second of the most common direct marketing measurements is the cost per piece. To find the cost per piece, you would take the total cost of the mailing and divide it by the total number of pieces sent. For example, if the total cost of the mailing was $4,500 and you sent 2000 direct mail pieces, the cost per piece would be $2.25. This is an important figure to keep in mind, because by lowering the cost per piece (as long as the number of responses stays the same), you can lower the cost per acquisition.
The third of the most common direct marketing measurements is the response rate. The response rate can be calculated by taking the number of people that responded and dividing it by the number of people that were sent the direct mail package. For example, if 2000 people were mailed a direct mail package and 20 people responded, the response rate would be 1%. This is an important tool that you can utilize to forecast the success of future mailings.
By using all three of these common direct marketing measurements, you can finally determine which half of your marketing is working, and which half is not.
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 AdAge.com | P&G Launches Major ROI Review AdAge.com CBS Chief Research Officer David Poltrack has been leading a Council for Research Excellence examination of issues surrounding use of the models and plans to push the Advertising Research Foundation, which he chairs, to launch a quality inquiry into ... |
 BuddyTV | 'Mad Men' Recap: Sex, Drugs and Advertising - BuddyTV BuddyTV This week on Mad Men, the show gets weird as all the characters turn to drugs to come up with ideas for the Chevy account. In the end, no one ends up coming up with any ideas at all. "Chevy is spelled wrong!" an exasperated Ted declares while looking ... |
Monday Medical: Be aware of tobacco advertising tactics Steamboat Pilot & Today It shouldn't take a heart attack or lung cancer to shock a person into recognizing the reality of tobacco use. Unfortunately, tobacco industry tactics continue to undermine anti-tobacco efforts, creating new tobacco users who struggle with nicotine ... |
 AdAge.com | Adland Gets a Good Look Through Google Glass AdAge.com SubscribeStaff ContactsShare / SaveRSS / TwitterMedia KitList RentalsFAQSubscriptionsAdvertisingArchivesDataEditorialWebsite IssuesTerms of Use · Subscriptions · Full AccessDigital AccessDataCenter+DataCenterCreativityMy Purchases · Agency ... |
Advertising and marketing group to offer scholarships - The Southern Illinoisan The Southern Applicants must be pursuing a degree in marketing, advertising, public relations, mass communications, graphic design, radio/television production or a related field and have at least a 3.0 grade point average. Special consideration will be given to ... |
Biz Buzz: Mellow Mushroom opens in Carytown today Richmond Times Dispatch An icon in the advertising world, Hughes has a blog, “unfinishedthinking: some thoughts on living and dying.” His reflections are profound, lighthearted, blunt, lyrical — sometimes all of those things at once. Dying, he wrote on April 29, “is ... |
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