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 Mon. August / 21 / 2017

Advertising Is Commoditized -- But You Don't Have To Be - Forbes

Forbes

Advertising Is Commoditized -- But You Don't Have To Be
Forbes
Advertising isn't just industrialized. Thanks to Henry Ford's example, it's commoditized. Assembly line advertising, marked by mass production and automation, will soon replace marketing jobs with dashboards and out mode an entire class of craftspeople.


TV Advertising Is Challenging, But Measurement Offers A Lifeline - AdExchanger

TV Advertising Is Challenging, But Measurement Offers A Lifeline
AdExchanger
Many claim TV advertising is dead, or at least dying. As digital alternatives emerge for advertisers and content consumption patterns shift from TV toward digital and on-demand services, advertisers may be reluctant to enter TV advertising or question ...


News Tribune hires new advertising director - Duluth News Tribune

Duluth News Tribune

News Tribune hires new advertising director
Duluth News Tribune
Megan Wedel started as the News Tribune's advertising director this month, taking on an established sales and marketing team that connects businesses with audiences across the Northland. "There are a lot of things that are impressive about Megan — she ...


Dale Spina Dead: Former Warner Bros. Advertising Executive Was ... - Hollywood Reporter

Hollywood Reporter

Dale Spina Dead: Former Warner Bros. Advertising Executive Was ...
Hollywood Reporter
He was the co-head of the studio's in-house Idea Place and came up with poster copy for 'Chariots of Fire.'

and more »

Immersv raises $10.5M to shake up mobile advertising with some ... - TechCrunch

TechCrunch

Immersv raises $10.5M to shake up mobile advertising with some ...
TechCrunch
Immersv, a mobile 360 VR ad network, wants to use the strengths of VR to improve mobile advertising, not only on headset but smartphones as well. For now ...

and more »

$0 In Tesla Advertising = 455000 Model 3 Reservation List - CleanTechnica

CleanTechnica

$0 In Tesla Advertising = 455000 Model 3 Reservation List
CleanTechnica
Have you ever wondered why you haven't seen a glitzy TV commercial for Tesla's new Model 3? According to Advertising Age*, “Tesla still doesn't need [any] paid advertising to make sales.” E.J. Schultz reports that, “even as the Model 3 goes on sale for ...

and more »

Complex Networks, Fuse Media to Offer Joint Advertising Packages - Variety

Variety

Complex Networks, Fuse Media to Offer Joint Advertising Packages
Variety
“This alliance is an organic extension of our brand and with Fuse, we have identified a truly like-minded partner interested in offering both the audience and the advertising community the untraditional and unexpected,” said Rich Antoniello, CEO of ...

and more »

Become a master of digital advertising with this bundle for only $29! - Windows Central

Windows Central

Become a master of digital advertising with this bundle for only $29!
Windows Central
Digital advertising and marketing is an ever-growing field where money is made every time someone clicks on an ad. It seems pretty straightforward, right? But if you want to learn how to make some real coin on the internet with your website you'll need ...


10 Years On: The iPhone's Impact On Advertising - Forbes

Forbes

10 Years On: The iPhone's Impact On Advertising
Forbes
One industry that the iPhone has had an unquestioningly huge impact on is digital advertising. In 2007, worldwide mobile advertising spend amounted to a paltry $1.7 billion, whereas this year it will amount to $143 billion. Within just 10 years, this ...


6 Stars That Are Taking The Advertising World By Storm - soompi

soompi

6 Stars That Are Taking The Advertising World By Storm
soompi
Stars and advertisements are inextricably bound up with each other: stars gain recognition by appearing in ads, and advertisement companies gain profit by utilizing a star's image. The freshest and trendiest stars receive endless offers from companies ...

and more »

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 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