Very Simple Newspaper Metrics

I've had the privelege of working with a few select clients who are willing to invest the time and resources to make their companies very good very quickly.

These are the business people who understand that their marketing deserves as much attention as their merchandising. They know that a shopper's first personal experience in their store must be consistant with the image created in their advertising.

They have the discipline to track the results of every advertising campaign.

And for many of them, eighth-page newspaper ads turn out to be the most cost-effective investment.¹

I was reminded of this when I came across a study by business-to-business magazine publisher Cahners Publishing (now Reed Business Information) to determine the average number of inquiries about products that were generated by various sized ads in their publications. Cahners Research looked at 86,002 ads in 34 of their publications. They analyzed nearly nine million inquiries for more information.

They concluded that the average number of responses increase as the size of the ad increases.² Without intending to, it appears that they also make a case for smaller ads.

The Cahners Study shows that, much like the Starch "noting factors," response falls off with decreases in ad size, but not on a one-to-one ratio. A full-page ad gets an average of 76 responses, but a half-page ad, which costs half as much, gets an average of 56 responses. And a quarter-page ad, which costs one-forth as much as a full page, gets an average of 52 responses.

Remember, we are not trying to reach the largest possible audience with this analysis. We're trying to achieve the largest possible return on our advertising investment. The evidence is that smaller ads are more cost effective.

When compared on a cost per "sale" basis, the chart looks like this:

A full page ad returns 76 responses. A half page ad returns 56. When the ad cost is compared to the ad response, it becomes obvious that each "sale" resulting from the half-page ad cost only 21% as much as each sale which resulted from the full-page ad. Each quarter-page "sale" costs only 10% as much.

Let me repeat that: The cost of a sale from a quarter-page ad is one tenth the cost of a sale of a full-page ad.

Now, granted, the Cahners Study looked at technical magazines, and not at newspapers, but it's conclusions reinforce what several of my clients have observed from their own advertising tracking.

This doesn't mean that you now only need to spend one-forth or one-eighth as much. What it means is running smaller ads at a greatly reduced cost will now allow you to run those smaller ads more often.

Finally, these observations should only be used as guidelines. In addition to frequency of exposure, response to your advertising will be affected by several other factors, including:

The impact quotient of your advertising copy. As my partner, Roy Williams, has said for years "Advertising is more effective when you have something to say."

Your share of voice. Think of this as the size of your ad budget when compared to the budgets of all of your competitors.

Your professional reputation (and the resulting customer Personal Experience Factor). How good are you at what you do, when compared to each of your competitors?

The market's potential. The number of dollars in your trade area isn't something that you're likely to change.

And finally, your choice of medium. There is evidence that products with short purchase cycles will sell better when advertised in visual media, and auditory media will provide better results when used to promote products with long purchase cycles.

All of these factors become less guesswork if you're willing to keep accurate records. Record the number of customers who buy from you each day. Record the times they return to purchase again each week, each month, each year. Calculate your largest selling items. Calculate the average ticket price. Track these averages and compare them to yesterday, to last week, last month, last year.

This will take fanatical dedication.

It's too easy to say "I'll bring those records up to speed tomorrow." This is far too important to delegate the responsibility to an employee. And it's all too much a reality that most business owners just do not have enough hours to handle the rest of their responsibilities and this as well.

What about you?

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¹ Please do not assume that I've just endorsed eighth-page ads at the exclusion of all other possibilites. As I pointed out in Is Bigger Really Better the only way to truthfully know your most cost effective ad size is to track responses to your business' advertising.

² Cahner's Conclusion: "Inquiries, on the average will increase as the size of the advertisement increases. The type of audience reached and the content of the advertisement play a major role in the number of inquiries generated, as well. Certain audiences do not inquire at all. This data sheet makes no attempt at analyzing the qualitative aspects of audience or advertisement."

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Is Bigger Really Better?

You've decided to run a series of newspaper ads, and the paper wants to know how much space to reserve for your ad. Is bigger always better?

In terms of increased readership, yes. But it also comes with an increase in cost.

You need to take both into account to calculate the return on your advertising investment.

(And in the interest of keeping this post to a reasonable length, we'll put off the "optimum size" discussion for one more installment. Today we'll limit the discussion to variables in ad size).

Depending on the section of the paper in which it's placed, and depending on the demographic profile of the readers one is attempting to reach, the newspaper readership studies conducted by Daniel Starch And Company lead to some interesting conclusions as to size and placement of ads.

According to Starch, when all other factors are equal, it's possible to cut the size of an ad in half and lose only 3% readership.¹

Newspaper advertising is sold by the column inch. Ignoring contract discounts, and advertiser can buy a full-page, two half-pages, four quarter-pages, eight eighth-pages (you get the idea) all for roughly the same price.

As we pointed out in the last post repetition is a critical element in persuasion, and running an ad twice, or four times, or eight dramatically increases the frequency of shoppers noticing the ad.

A single full-page ad delivers a frequency of one. Eight eighth-page ads, assuming different pages or different days for each ad insertion, will deliver a frequency of approximately six. (See A Strategy For Frequency In Newspaper Advertising for a more complete explanation).

So, why is this not an easy decision? If frequency sells, why not always buy eight one-eighth page ads instead of a single full-page ad?

Because in order for an ad to "work" it must first be noticed. A full page ad is more likely to be noticed.

How much more?

A full-page ad is likely to be "noted" by 42% of the readers. An eighth-page by only 23%. The bigger the ad, the more people will see it.

But wait a minute. A full page only get's "noted" 43% fo the time? Does this mean that no matter what size your ad, more than half the readership will never notice your ad?

Yes. Exactly.

And so what?

Let's be honest, nothing being advertised appeals to everyone. People who are interested in what you have for sale are the readers likely to note, or to read your ad.

This is where it gets interesting. The number of people who see the ad is of lesser importance than the number of those people who, upon reading the ad, are motivated to buy from you.

With enough patience, and a good tracking system, you can actually measure the impact of different sizes of newspaper or magazine ads.

My good friend and restauranteur extraordinaire, Roger de la Paz, owner of Richie's Real American Diner in Victorville, California, has that patience. He's been keeping incredibly detailed records of the effect of his advertising since he opened Richie's.

Roger tracks his newspaper ads with the simplest of measurements. He compares the demand for specific food items before the ad runs, and again afterward. He is then able to calculate the increased demand for specific menu items against the cost of the ads.

Over a three year period, Roger demonstrated that his most profitable ad size is two columns wide by three inches deep. Ads smaller than "two-by-three" had less impact on sales. Ads progressively larger than two-by-three did increase gross sales, but not enough to warrant the additional cost.

By carefully tracking the specifics of size, placement, and frequency of his newspaper advertising Roger is now able to predict to within a few dollars what Richie's Real American Diner's return on newspaper advertising investment will be.

By the way, he regularly tests the content of his ads, too.

Right now, Richie's newspaper advertising delivers a consistantly predictable 118.06% increase in gross sales every day the ads run.

Next post we'll definately reach some conclusions about the optimum ad size for top return on investment. Until then, are you keeping track of the effect of your ads?

Isn't it time you started?

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¹ The reduction in noting scores from a quarter-page (26%) to an eighth-page (23%) is a difference of three percent when referenced to total readership. It is, however, a loss of nearly 12% of the number of people who notice the ad.

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A Strategy For Frequency In Newspaper Advertising

In most cases, a single exposure to an ad has very limited value. It takes a campaign of advertisements to effect shoppers, although truthfully this will vary slightly by medium.

For instance, a supermarket that buys two adjacent full page newspaper ads every Thursday to list all of the specially priced items that week, will in short time train Transactional shoppers to pick up every Thursday's paper to scan the ad for bargains.

Large automobile dealers will also have some success attracting Transactional shoppers using this strategy. Unfortunately, as soon as their competitors start doing the same thing, the effectiveness of the ads becomes dependant not upon the size of ad, but upon the size of the loss leaders.

And this "list everything" strategy is virtually useless in attracting new Relational shoppers to your business.

So does that mean newspaper advertising is only valuable when the advertiser's goal is Transactional (loss leader) business?

No. Not at all. It merely means that you need to take steps to increase the frequency of your ads. Why? Because sleep is the great eraser of short-term memory, which makes it the single biggest obsticle to advertising retention.

As we pointed out in How Many Ads Do I Need To Buy?, the evidence indicates that a minimum of three exposures to the ad in a seven day period is the minimum required to produce a positive return on investment.

Does this mean three ads a week will push your results into black ink?

Unfortunately, no.

Suppose your local daily newspaper has 20,000 readers per average day. That means 20,000 readers will scan the Monday paper. 20,000 will also scan the Tuesday paper. Not all of them will be the same 20,000 persons.

Perhaps 3,000 of Monday's readers didn't see the paper on Tuesday, but another 3,000 people who didn't read Monday's paper will pick up the paper on Tuesday. That means 17,000 people saw both papers.

If yet another 3,000 people didn't pick up the paper Monday or Tuesday, but read Wednesday's paper, it means 14,000 saw all three.



In actuality, the frequency build up in most papers is a bit quicker. In most newspapers across the U.S. it will take four ads within a single five day period for all of the average daily readers to be exposed an average of three times each.

Q: So, what's the most effective way to purchase newspaper advertising?

A: Cut your ad size to one fourth and run it four times as often.

Next time we'll discuss determining the optimum ad size to make this strategy deliver the best return on your newspaper advertising investment.

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How Many Ads Do I Need To Buy?

Too many times we design an advertising schedule to reach the "average consumer."

If you look at the usage of media by consumers, it's easy to come up with averages. It's much harder to schedule your ads for maximum return on investment.

Take radio listening, as an example. Dividing the number of people listening at any particular time by the number who have listened over the course of the week, and then multiplying that fraction by the time they listened will give us an average "time spent listening," say, 20 hours per week.

But 20 hours is very misleading. Seminal researcher Alfred Politz¹ divided the audience into equal fifths (quintiles). He discovered that not all radio listeners are created equal.

When the average is 20 hours per week, the heaviest users, (the top 20%), stick with their favorite station for a full 60 hours per week. At the other extreme, the lightest users listen for only 2 hours per week.

Within each quintile (equal fifth) the average listening might look like:



Several studies ¹ have confirmed that consumers of media are not equal, even within the medium. Each medium has very heavy consumption at the top quintile, which grows progressively lighter as each additional quintile enters the equation. This same pattern occurs in television viewing, reading of newspapers and magazines, and even the reading of outdoor signs.

It's been demonstrated that the average person needs to be "exposed" to your ad a minimum of three times within each seven day period ² for the ad to be effective at motivating that person to shop with you.

But, with each of our quintiles listening for progressively shorter periods of time, it's going to take more ads to reach each successive quintile.

And that makes sense, doesn't it?

Our top quintile listens 60 hours per week. If we run 3 ads per week, they're likely to hear all of them.

The bottom quintile listens for only 2 hours per week. Unless the ad runs during those two hours, they'll never hear it.

To assure enough ads that the bottom quintile will be exposed to three of them, we'll need a schedule of 184 ads ³.




184 ads? Per week? How much would you have to pay for 184 ads per week? I'm willing to wager that you can't afford such a heavy schedule. At least, not long-term. You can't afford to persue the bottom quintile. Without a monster advertising budget, one fifth of the potential audience will never hear your ads.

Perhaps you could stretch the budget enough to afford 53 ads. That's a schedule that could motivate the fourth quintile. Congratulations. You've broadcast enough ads to persuade quintiles one, two, three, and four.

Of course, we now have another problem.

The first quintile only needed 3 ads to "get it." Run 50 additional ads per week once they understand your message, and it's highly probable that you'll irritate those listeners. Annoy them this much and they'll refuse to do business with you. Somewhere around ad number 17 they'll tune in some other radio station.⁴

Customize your schedule for the heavy listeners and the light listeners will miss your ads. Plan to impact light listeners and you'll repel heavy listeners.

You're going to miss half of the audience. There's no way around it.

Which half do you give up?

The expensive half, of course.

Your most cost-effective solution is to schedule enough ads to reach quintile one, quintile two, and about half of quintile three. Wizard of Ads ^© media buyers have determined that, on most radio stations across the United States, a schedule of 21 ads ⁵ each week will provide the greatest sales impact from the least number of dollars invested.

Newspapers have a similar weekly buildup of awareness. Like radio, one ad is minimally effective. It takes the same three exposures a week to make newspaper advertising provide maximum return on your advertising investment. We’ll look at newspaper scheduling next time.

And depending upon the purchase cycle, as few as 2% of those people will be "in the market" on any given week. You'll need to run this schedule next week to get the people who are ready to buy next week. You'll need to run it the week after that to reach the people who are ready to buy that week. You'll need to... well, you understand. You'll need to run it every week that you intend to stay open for business.

However, some good news: the light users of one radio station tend to be the heavy users of another. And the average listener tunes into 3.6 stations per week. Find stations which share the same listeners, run 21 ads per week on each, and start getting spectacular results - assuming, of course, that your message is compelling and your offer is appealing.

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¹. Beginning with the 1963 Politz Study of New York Radio.

². Effective Frequency, The Relationship Between Frequency And Advertising Effectiveness, Mike Naples. ANA Publishing, 1979.

³. All figures based on Radio's New Math, © 1978 Group W Radio.

⁴. Radio Program Directors HATE ads which run in double digits daily. Of course, Program Directors also know that about the time listeners are just learning the words, Disc Jockeys say they'll puke if that song plays again. Through the nature of their jobs Disc Jockeys have long Times Spent Listening.

⁵. 21 ads per week, plus or minus two.

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How Will Advertising Affect My Sales?

You have a new store. It’s ready to open to the public. What’s the first thing you should do?

You should hang out a “Now Open” sign.

People will drive by and see the sign. Some will walk in to see what you have to offer. Some will buy. Then, depending on that first experience, some will come back to buy again, and some will recommend you to other customers.

You advertise to reach people who never drive by.

I bring this up because a very common question is, "If I spend money on advertising, what will I get back? Can you guarantee I'll see any results at all?"

To that I have to answer "Maybe."

Let's look at the variables.

Your traffic driven sales will depend on location. Your repeat sales and referral sales will depend on customer experience. Your advertising driven sales will depend on the salience of your message, your share of voice, and the frequency of delivery of your message.

If you had a high profile location, perhaps the intersection of two major highways, your sales may develop like this:

1) Traffic Driven Sales . . 70%
2) Repeat Sales . . . . . . . 16%
3) Referral Sales . . . . . . . 5%
4) Advertising Sales . . . . .9%

That high profile location, coupled with the experience your customers have shopping with you, can determine as much as 91% of future growth. The last 9% will come from effective advertising.

Consistently well done advertising could also effect the number of people who normally just drive by, but today decided have decided to walk in.

Perhaps you don't have a prime location, but are instead a neighborhood store on an average street with average parking. Your sales could develop this way:

1) Traffic Driven Sales . . .19%
2) Repeat Sales . . . . . . . .36%
3) Referral Sales . . . . . . . 14%
4) Advertising Sales . . . . .31%

Sometimes businesspeople expect that if they increase their advertising budget by 10% that they should see a corresponding 10% increase in sales.

Under the best of circumstances a 10% advertising increase in our first example would boost sales by slightly less than 1%. In our second example our best possible outcome would be a sales boost of slightly more than 3%.

You’ll note that I said “best of circumstances.” We’ve assumed that your competitors aren’t increasing their spending or increasing the relevance of their message.

It also assumes that you don’t have any new competitors.

Most businesses aren’t willing to advertise aggressively enough to maximize sales and gain significant market share.

This provides a major opportunity for those who are.

Which are you?

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