Marketing Tips

Marketing Tips

Free Direct Marketing Tips, Ideas, Business Plans, Case Studies, Articles and More.

Home Affiliate Program Free Idea-Kit Marketing Tutorial Articles Motivation
About Joe Marketing Myths Internet Marketing Case Studies Marketing Tips
The Give to Get Marketing Solution Make 50% Commissions Marketing Store
free-kit Get Your Free Marketing Idea-Kit:
Within minutes you'll be using these simple, low-cost and no-cost methods for attracting new customers and increasing sales from your existing customers.
Click here to see what you'll get.


Q. How can I compare the profitability of one ad to another?
I place a number of different ads in different newspapers to promote my business. How can I determine which ads are the most profitable for me?

rule

A. Marketing expert, Joe Gracia, responds:

Create an Effective Tracking System

The very first thing you must do is create an effective and consistent tracking system, so that you can accurately count the number of responses from each ad.

This may sound very basic, but you would be surprised at how few business owners ever track the results of any of their marketing efforts.

Without such a tracking system, you really are shooting in the dark and your chances of success are very slim.

To create a tracking system, you can assign a different code to each ad, such as a Dept. Number in the address, or a fictitious Extension number next to the phone number.

Another way to track is to include a coupon in each ad, with a code within the coupon that tells you which ad and publication the coupon represents.

When someone responds to one of your ads, you either collect the coupons, or ask for the code in the ad, and record it on your daily tracking log. Then each week, you can add up the responses for each ad and you'll then know which ones produced for you and which ones didn't.

Without an effective tracking system, you will be throwing your money down the drain.

Our Give to Get Marketing Solution provides you with an easy to use tracking system complete with ready to fill in forms to make tracking a breeze.

Once you have your tracking system in place, you can then easily compare the effectiveness of each of your ads.

Comparing Your Ads

Cost Per Response (CPR)
One way to compare ads is to compare the Cost Per Response. Simply divide the cost of the ad by the number of responses.

If one ad cost $100 and you received 10 responses, then your CPR for that particular ad would be $10 per response.

If a larger ad cost $200 and you received 15 responses, then your CPR for that ad would be $13.33 per response.

The smaller ad produced a smaller Cost Per Response.

Cost Per Sale (CPS)
To determine the Cost Per Sale, simply divide the cost of the ad by the number of actual sales.

Again, if you paid $100 for an ad and it produced 10 sales, your Cost Per Sale would be $10.

Compare that to an ad that cost $500 and produced 83 sales. Your Cost Per Sale would be $6.

In that case the more expensive ad would be the more profitable.

Return On Investment (ROI)
Some advertisers use a more stringent gauge called Return On Investment.

ROI % = ((Total Gross Profit divided by Ad Cost) -1) X 100

That's your Total Gross Profit divided by your Ad Cost. Take that number and subtract 1. Then multiply that by 100. The result will be your Return on Investment.

Let's say that you are selling a product for $50, and your Gross Profit on that product is $25 each.

You place an ad that costs $300 and you received 20 orders for your product.

Here's your ROI % formula:

ROI % = (($25 Gross Profit X 20 Sales) / ($300 Ad Cost)) -1 X 100

ROI % = $500 Gross Profit / $300 Ad Cost = 1.67

1.67 minus 1 = .67

.67 X 100 = 67

ROI % = 67%

If you determined that another ad had a ROI% of 22%, then, all things being equal, the ad with a 67% ROI was a much more profitable ad for you.

Determining Your Break Even Point

Often you will want to know exactly how many product units you would have to sell to break even on your ad cost. Here is the formula for determining your break even point.

To determine your break even point, you need to know your gross profit on your product, and your total ad cost. Simply divide your ad cost by your gross profit and the result is your break even point.

Break Even = Ad Cost divided by Product Gross Profit

For instance, if you are selling an item that has a $25 gross profit, and you run an ad that costs $200, then you divide $200 by $25. The result is 8. That is how many units you must sell from that one ad to break even.

Break Even = $200 Ad Cost divided by $25 Gross Profit = 8 Units

If you are selling a number of different products, then use the average product Gross Profit in your formula.

rule



GTG Marketing Solution Click here to learn how you can start attracting customers to your business like a magnet!
Our Give to Get Marketing Solution is the same strategy we've been teaching our clients to use for over ten years, and it's the system we use to grow our own business.

It's easy to understand, it's easy to use, and most important, it works.

rule
Return to MARKETING TIPS Index Page

Click Here to Receive Your FREE Marketing Idea-Kit

Return to the Give To Get Marketing Home Page


rule
Click Here to Contact Us

Give to Get Marketing
611 Arlington Way
Watertown, WI 53094


Copyright 2000-2016
Give to Get Marketing


Site Map
rule Free Marketing Idea-Kit
CLICK HERE
to See What
You'll Receive


Home Affiliate Program Free Idea-Kit Marketing Tutorial Articles Motivation
About Joe Marketing Myths Internet Marketing Case Studies Marketing Tips
The Give to Get Marketing Solution Make 50% Commissions Marketing Store