The Big Advertising Disconnect
I’m always surprised how much businesses—especially small businesses—spend on advertising in print media: newspapers and magazines.
Check out the following chart from KPCB/eMarketer:
While people only spend 8% (and dropping) of their media consumption time with print, advertisers devote 27% of their media budgets to print. On the flipside, advertisers only spend 19% of their budgets on online advertising, yet their audience is spending 25% (and rising) of its media consumption time online.
The problem is exacerbated by the significantly higher cost of print advertising. The following chart is a few years old, but it shows the average CPM (cost per thousand advertising impressions) of various media.
Newspaper costs nearly $65 per 1000 impressions, while online costs less than $4.
Why do small businesses overspend on print advertising? I can think of a few reasons:
- Small businesses are more comfortable with tangible media like newspaper and magazine
- Magazine ads (especially full page color ads in glossy magazines) have a high perceived value. Small businesses likely believe that they will benefit from some sort of “halo effect” from being associated with the magazine
- Small businesses believe that TV is out of reach for them (even though TV is less expensive than print)
- Small businesses reason that it is easier to produce a decent magazine ad than a TV commercial (which is true) and they are afraid that crappy TV-station-produced commercials will negatively impact their brand (also true)
If you want to stretch your ad budget, think about shifting the dollars you spend on print ads to online or TV. Need help? Contact me.
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Time to Dump Your Yellow Pages Ad?
Yellow Pages ads used to be an essential ingredient in small business marketing — which made sense at the time, since whenever someone needed a plumber, roofer, locksmith, etc., the first thing they would do was “let their fingers do the walking.” Yellow Pages ads usually delivered decent quality leads, because most people pick up the phone when they are ready to take action.
Today, there is a new Yellow Pages that works a lot faster than the old one. It’s called “Google.”
Instead of flipping through pages and browsing through nearly identical ads, you type in exactly what you are looking for. Not just “garage doors,” but “wooden garage doors.”
Like other media, the yellow page directory functionality is moving online. The question for a small business is: where are my potential customers looking for me? The chart below is from a 2009 study by TMP/comScore about How People Find Local Info About Local Businesses (broken down by age).
What we see here is that for everyone under age 65, “searching online” is the number one way they find information on local businesses. The 65+ age group still prefers print (including Yellow Pages), but not by much. And every year the numbers for print usage will decrease as the percentage of people searching online increases.
So unless your customers are aged 65+, you’ve already got one good reason to dump your Yellow Page ad. Reason #2 might be cost.
Matt Carlisle has an interesting post on his blog entitled “Stop Letting Your Fingers Do the Walking” where he cites a CRM Associates study, that reveals that a typical single Yellow Page ad will deliver on average 422 calls at a cost of $10.00 per-call. Compare that cost/lead to what Google charges for a paid placement in its search results. Here are a few local search phrases with cost/lead (using “Cleveland” as a sample local market):
- Cleveland plumber: $2.80
- Cleveland electrician: $2.95
- Cleveland garage door repair: $2.57
- Cleveland painter: $3.64
You get the idea. $3-$4 per lead is a much better deal than $10 per lead.
So by shifting your Yellow Pages ad budget online, you may be able to increase the number of leads by 3x — or be able to reduce your budget by one third.
If you are nervous about completely dumping your Yellow Pages ad, try downsizing it from a full page to a half page, or a half page to a quarter page, etc. — and using the money you save to try an online campaign.
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