By John Foust
Advertising has a dirty little secret. Most ad managers know it, but don’t like to bring up the subject in staff meetings. Most sales people know it, but wouldn’t dare mention it in sales presentations. And most advertisers know about it, even though it rarely figures into their marketing plans.
What is this dirty little secret? Ad churn. When an ad campaign doesn’t work – or falls short of expectations – the advertiser is likely to pull out of the paper. And the sales person is faced with the challenge of finding a replacement for that lost revenue.
It’s all about expectations. In their eagerness to close the deal, sales people have a tendency to oversell the possibility of making their prospects’ phones and cash registers ring. “Just run some ads,” they say, “and you’ll expand your customer base and increase sales.” But once the ads start running, the new advertiser’s focus shifts from words (what the sales person said) to results (what the ads actually do). If the ads don’t meet expectations, other media choices become more enticing.
In my opinion, disgruntled advertisers are the primary prospects for new media outlets. If they’re unhappy with Publication A, they’ll readily consider Publication B.
Churn is expensive. I’ve heard that the costs of replacing a lost customer can be as high as ten times more than the cost of keeping an existing client. Losing one advertiser can hurt, but losing a number of advertisers can be devastating.
The days of John Wanamaker are long gone. Wanamaker, the marketing pioneer who opened Philadelphia’s first department store in 1896, famously said: “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.” Today we have Pay-Per-Click online advertising (PPC), in which advertising charges are based on response numbers.
The growth of PPC advertising is pressuring traditional media to produce measurable results for advertisers. That’s why it is increasingly important to manage expectations. Simply running ads is not enough. Those ads have to work.
There are essentially two types of advertising: image ads and response ads. Image ads are designed to build recognition and response ads are intended to generate immediate results. Unfortunately, some advertisers think that “putting their name out there” in image ads will produce customers right away. That’s possible, but not likely. When new customers don’t flood in, an advertiser might jump ship and run ads elsewhere.
On the other hand, response ads can give advertisers an immediate reading on results. The key is to make the right offer. Instead of saying, “here’s a whiz-bang benefit of using our widget,” say “here’s why you should buy our widget today.
Although image ads and response ads play different roles, both are important. Brand recognition is a good thing. And immediate response is a good thing, too.
Churn is a big concern in the advertising world. Perhaps it’s time for those ad managers who have been saying, “Sell ads” to start saying, “Sell ads that work.”
(c) Copyright 2014 by John Foust. All rights reserved.
John Foust has conducted training programs for thousands of newspaper advertising professionals. Many ad departments are using his training videos to save time and get quick results from in-house training. Email for information: email@example.com.