How to Know Which Half of Your Advertising Budget is Wasted


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“Half the money I spend on advertising is wasted; the trouble is, I don’t know which half.”

“Half the money I spend on advertising is wasted; the trouble is, I don’t know which half.”

John Wannamaker may not be a household name but he opened the first department store in Philadelphia in the late 1800’s and is believed to be the inventor of the price tag and the seasonal sale. He was the first retailer to place a half-page newspaper ad, and also the first full-page ad five years later. He is widely considered to be one of the fore-fathers of advertising and credited with the famous phrase: “Half the money I spend on advertising is wasted; the trouble is, I don’t know which half.”

His words survive as one of the most frequently quoted clichés in marketing and advertising, even after radio, TV and now the internet, have replaced the dominance of print advertising.

Why with all we’ve accomplished in the last one hundred and twenty years, is this quote still relevant and significant to you (and to all marketers) today?

In fact how do you know you’re not throwing away 2/3 of your advertising budget? Or perhaps even as much as 3/4?

How can you be sure that your next campaign, sitting on your desk waiting for your approval, won’t be an abysmal failure – sucking your bank account dry and producing no measurable influx of qualified leads and sales?

Do you know with certainty which half of your advertising budget is wasted?  Want if you needed to find out?

Right now, your audience is getting harder to reach in all the traditional media channels, and the rules of marketing have changed. Print newspaper readership, radio listeners and even TV viewers are down. Consumers have adapted to new technologies – the internet, iTunes, podcasts, downloads – and can now comfortably avoid unwanted advertising in many of these old channels.

Many of the old ways are being replaced by new ones. The internet, content marketing, video and social media have emerged as the new, dominant players. To succeed in this new realm of advertising, requires a shift in both mindset and strategy.

You used to be able to get away with talking at your prospects (or having one-way conversations), now you must respond to their comments (positive and negative) in real time.
Where five years ago you could simply focus on spending less to find more local prospects, now you must excel at “being found” in a sea of global competitors.

Thankfully, these new mediums bring with them two significant benefits – targeting and measurability. Finally, improving your odds of determining which half of your advertising budget is wasted, is not only possible, but refreshingly do-able. You simply have to know which tips and tools to use to maximize your return on investment (ROI).

Here are five practical tips for developing an effective measurement strategy for your online and offline marketing communications – (and for determining which half of your advertising budget is wasted):

1) Monitor all incoming leads
Where possible, place a unique phone number (or email address) in different media placements to gauge which ad creative, copy, design elements or physical placement garners the most qualified traffic and sales. Each unique number or email address can easily be re-routed to your primary incoming line or email, so you can streamline the process of receiving and replying to these valuable enquiries. To minimize confusion with your target audience, try to refrain from using too many different numbers at once.
For some brands, that are highly identifiable and use a memorable phone number, tracking may not be viable. As an alternative, try recording the inbound calls and use the insights to train your sales team. While it may cost more, the recorded conversations will provide significant insight into the interest level, FAQ’s, objections and pain/issues of your prospects.

2) Use Split Testing
When you see a banner, video, text or display ad online, it has been sent to your computer or mobile device from an ad server. In most cases, what this means is that the advertiser will have been given the opportunity to split test their ads – to change their online creative in real time to monitor impressions, clicks, engagement and conversions. Essentially some of the audience will see one version of the ad, while others may see different versions.

But split testing doesn’t just apply to online ads and websites. In fact it can be used effectively with any online or offline marketing piece to test different creative, copy, or calls to action. It allows your audience to tell you in tangible terms which messages they prefer and are inclined to respond to favourably.

3) Set Up Specific Landing Pages
Most small business owners will make the mistake of wasting a lot of money on ads to send traffic direct to their homepage. More often than not, 90% of this traffic will bounce off your website within seconds because the content they are interested in is either not featured prominently on the homepage or is just too hard to find. In order to maximize the engagement of your traffic and your ROI, you need to ensure that you are taking your leads to pages where the specific content and offer you are advertising is the ONLY information presented.

The easiest way to do this is to set up landing (or private) pages on your site with unique URLs for each offer. The landing page will give each user a more customized experience and it will allow you to set the stage for an inquiry, call to action or sale.

These landing pages are also extremely effective for allowing you to track and measure ROI from both online and offline ads – when a prospect converts, you can directly attribute that conversion to a specific marketing piece because the landing page URL is unique for each one. Where possible, remember to use a user-friendly URL (one that is short, relevant and easy to remember) to drive traffic from offline media – it will boost retention, recall and action by up to ten times.

4) Google Analytics
Google Analytics is an invaluable tool that can help you measure what is working and what isn’t on your website. However, just like the human brain, most site owners haven’t fully tapped into the full potential and power of it. In addition to telling you where your traffic is coming from and which search terms or links were used to find you, Google Analytics also measures where users click most on a given page, how long they spent on your site and where they go when they navigate away from your page. Google analytics can provide you with enough data to isolate and eliminate marketing that’s not generating profitable growth.

Research indicates that the average conversion rate for a website is between 2.2 – 4%. What this means is that 96-97.8% of the visitors that came to your site today, left without taking any action. They key to minimizing the leakage and maximizing the percentage that remember your message and take action lies in analysing the data that Google can provide on your website traffic and trends. It doesn’t make sense to spend more money on marketing if a large percentage of your audience is choosing not to take action.

5) Stop Chasing Clicks and Eyeballs
A click (or eyeball viewing your offline ad) means nothing to your business. It earns no revenue and creates no brand equity. Your advertising has to have a tangible end goal – and it shouldn’t be to reach the most eyeballs or generate lots of clicks. To have a successful business, you need people to discover how you can cure their pain, seek more information, join your list, or purchase your product/service. Success lies not in how many people know what you do but rather in how many you are able to connect with and inspire to say “yes” to your product/service.

ImagineeringNow
About The Author
Rhondalynn's life changed forever after the loss of her mother due to a senseless tragedy in 1992. She decided that despite her formal training and a promising career as a lawyer and chartered accountant, she wanted to do something more. So despite the fact she had already invested 10 years of her adult life in university and articling, she did the unthinkable. She left her high paid job as Commercial Manager for one of the largest corporations in the country, she re-trained herself in the sciences of the mind and she discovered a passion for writing and sharing her knowledge with business owners and executives. Rhondalynn has distilled the secrets to business success - that she learned from her life experience and working in GM level roles with Price Waterhouse Coopers, Max Factor, Village Cinemas, and Coles Group Ltd. - and produced a simple step-by-step process that you can apply to your business to boost your sales and bottom line. Rhondalynn can help you put strategies in place to grow your bottom line and ensure that your customers would never think of going elsewhere. She is the leading expert on harnessing the power of your brain and using it to improve your financial results in business. Rhondalynn is the author of On The Shoulders of Giants, Imagineering Your Destiny, Sobre Hombros deGigantes, Financial Foreplay, and Sales Seduction. She has appeared on CNN, Bnet/CBS, Channel 7, Channel 9, Kochie's Business Builders and 3AW, and writes for Yahoo, MYOB, Fast Thinking, Sunday Life, Dynamic Business, Business Spectator and Australian Retailer.

5 Comments:


  • By Dawn Fotopulos 29 Apr 2013

    This is one of the most cogent and useful articles on how to use the web to drive revenues I’ve ever seen. Brava and thank you!

  • By Does Your Small Business Marketing Message Inspire Action or Put People to Sleep? - ImagineeringNow 04 Aug 2013

    […] How to Know Which Half of Your Advertising Budget is Wasted […]

  • By Bernd Heyer 30 Sep 2013

    I agree with Dawn but would like to add a click is a necessary but not a sufficient conditon, or as Rand Fishkin (MOZ) put it: no traffic, no business.

  • By Paul Whitaker 10 Nov 2015

    An interesting article – clear and jargon-free; I haven’t got around to creating a website for my company but about to do so. I have a long-established advertising/PR Agency in Leeds, but not good with ‘technology’! So bad, that the joke in my family is, “Paul can fly an aeroplane, but can barely cope with a Chip&Pin machine!”
    Both comments true, sadly. So, it’s learning time for me!

  • By Opinion: Think digital ads don’t work? You’re bad at math – Digital Review 04 Mar 2016

    Because digital ads work phenomenally well, provided you calculate the steps. To paraphrase John Wanamaker: Half the people in advertising don’t know how to measure what works. My problem is that half.

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