On the national advertising front, newspapers have it tough. We know advertising in our newspaper "works."
We have plenty of local success stories about how we’ve helped our local advertisers grow their businesses. However, we have difficulty conveying this to the young and inexperienced media planners and buyers that have not been brought up reading a newspaper.
They could all bring up circulation losses, dependence on the Internet for content, continued rate increases, and other excuses. Until now. The Direct Marketing
Association (DMA), in its Economic Impact: U.S. Direct Marketing Today report provides information that many national agencies and advertisers might not be aware of.
In fact, newspapers might not even be familiar with these numbers. It now becomes your job to put this information into context that will open the eyes of those nonbelievers, keeping in mind that "direct marketing" can be used for three specific purposes; to solicit a direct-order, generate a lead or drive store traffic.
Expenditure to Sales Ratios important
Newspaper advertising (Recruitment or Retail) "expenditures to sales ratios" for direct marketing advertising in 2002 is ranked first in efficiency. Newspaper advertising has the lowest and most efficient cost to sales ratio of all media in the report, including direct mail, magazines, telemarketing, radio, and television.
In other words, a direct marketing advertiser stretches his advertising budget farther in newspapers than any other medium. The newspaper advertising cost to sales ratio averages 0.071 and is predicted to come in at 0.067 in 2006. What does this mean?
For every 7.1 cents spent on newspaper direct marketing, $1 in sales is generated.
By comparison, with magazine space advertising 9.8 cents will yield $1 in sales, with telephone marketing 11.2 cents will yield $1 in sales. The numbers are higher with radio at 14.1 cents and with televison at 17 cents yielding $1 in sales.
That’s not to say that radio and TV advertising aren’t effective. Of course, they are, especially when used in a "branding" campaign, creating awareness through sight and sound. But, when it comes to direct marketing and response, newspapers will generate the best return for the money spent.
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Return on Investment
In simpler terms, advertising is an investment. You can extrapolate these ratios to provide an average return on media investment per $1 spent on direct marketing as such: