ROI Factory

Print Ad Response Rates

One of the most common advertising buys for small businesses are small print ads in the back of
magazines, known in the trade as "small space print". Magazines offer excellent targeting potential
and are a primary resource for news and information, so they are widely read by both the advertiser
and their target markets.  Although direct response professionals usually project a response rate of
less than 0.1%, most entrepreneurs are aware of many successful businesses launched on the shoulders of small space print. Three companies quickly come to mind;

• The Sharper Image (sold one of the first digital runner's watches);

• Perfect Pushup (started in the back of outdoor magazines and is quickly becoming a huge fitnessbrand); and

• amazon.com, (started with print ads in the back of the New York Times Book Review).

As we prepared to launch moto.aero last fall, one magazine in particular seemed to be the perfect
environment for our launch ad, Make magazine.  Make is the bible of electronic and
mechancially-minded tinkerers.  It's audience represents the sweet spot of the moto.aero target
markets.  In addition to it's ability to put our ad in front of our target audience, Make also
offered the following benefits:

• The magazine would hit newsstands the week of Thanksgiving, which we believed would result in more pass-along and more time spent with the magazine, due to time spent traveling and away from work for the holidays

• The holiday issue featured Spy Tech as it's cover theme, which we thought would draw in additional newsstand purchases from gadget lovers

• The circulation base was growing rapidly, and the sales rep suggested that they might hit 250,000 copies against a rate base of only 150,000.  That's like getting 100,000 free impressions.

• The CPM was approximately $7 for the base, or closer to $5.50 if we received an additional 50,000 readers beyond the rate base (discounting the rep's potential 100,000 by 50%.)

The Ad

Although the moto.aero site had not yet launched, I felt the opportunity to be in Make's Spy Tech issue was too good to pass up so we committed to a single test insertion.  We created a print ad we hoped would stand out on the page for its use of white-space and the unique colors of the moto.aero logo.  We used the word "Makers" rather than our traditional name for that target audience, tinkerers/gadget hounds, in order to create a connection to the Make magazine fans. The day before the ad was supposed to ship, we decided we needed a strong call-to-action, so we added the $500 monthly contest to the ad.

It's usually very difficult to attribute visits generated by offline advertising without resorting to a unique URL (i.e. moto.aero/make_ad_01) or 800 number.  More sophisticated visitors know that the URL extension is a tracking mechanism and many simply omit it, or they remember the site but not the extension.  We did not include the moto.aero toll-free number because we did not think we had enough people to handle the calls, but didn't think we would get enough calls to warrant hiring a call center.

The Analysis

We had a unique opportunity with this print ad to track visits to the site with a fair degree of
confidence in our data.  The launch email traffic from the October email had subsided.  We had not
launched any other marketing or advertising efforts by the time the issue was available to readers,
so there was almost no traffic to the site outside of search visits generated by our content, which
are easy to differentiate.  Most advertisers never have such a clean sheet from which to test and
gather data, due to the myriad marketing and advertising activities they have underway at all times.

As you can see from the chart, 283 visitors were classified as Direct Traffic between November 23rd
and December 30th.  While some of the Direct Traffic visitors may have come from other sources, we
believe that the majority of the visits are attributable to the Make ad.

Make also posts their magazine online for print subscribers who want online access at no additional
charge (a nice touch!).  These 10 visits are in addition to the 283 Direct Traffic visitors.  And
finally, a blogger at Book of Joe saw our print ad and mentioned it in his blog, which added another
51 visits that we'll credit to the Make insertion.

The Make print ad generated approximately 340 total visits.  The bounce rate for those visitors,
which is a good indicator of visitor interest, were good at 17-40% and the page views were excellent
at 5-8 pages per visitor, much better than the 2.7 page views generated by Google cpc traffic, so we
know that we were attracting the right audience.  Overall visit rate was 0.17%, which is almost
double the 0.10% ballpark number we use to estimate small-space print traffic in our planning.  So
far, so good.  Once again, we did a great job of driving traffic to the site.  The problem, which we
were soon to find affected all visitors, was that  nobody registered, nobody submitted anything, and
nobody purchased anything!  

Overall cost per visit was approximately $3/visit if calculated on just the media costs, which is how
most agencies report CPV.  However, if we were to add even very minor agency fees to the overall
cost, CPV easily rises to $5/visit or more.  This is approximately 10x the CPV of the moto.aero
Google and Facebook ads.

The Learning

We validated our ballpark projection rate of 0.10% for small-space print responses.  This reinforces
the usual expectation that print is to be used as a "branding" medium rather than a "response"
medium.

• Print ads are approximately 10x less efficient in driving traffic than online CPC ads

We learned, yet again, that we should have tested less expensive ad units and established some basic success factors before committing to a print ad.  The money we spent could have generated 10x more visits if spent on search, and we'd have been able to test a lot more creative executions.  The additional testing would have taught us a lot more about how to talk to our audience.  For example, our online advertising has shown that product photos generate far better clickthrough rates than logos.  Had we waited, we would also have realized that something about the e-commerce site is not working for our visitors, since nobody ever buys anything.  But flush with the excitement of finally launching the site, we rushed ourselves into an ego-driven print buy rather than taking our time and approaching the planning with more discipline.  We complain when clients make rushed, emotional decisions, then I turn around and do the same thing!

• Plans should be based on analysis and hypotheses rather than emotion
  

A word on branding

One of the constant intangibles of advertising is the contribution each ad impression makes to consumers' overall brand perception.  Every exposure to your advertising and marketing creates some sort of impression on the consumer.  I've begun to think of "brand" as a catch-all term that covers  the many invaluable yet unmeasurable benefits of advertising and marketing.  Most of the advertising industry is focused on maximizing brand awareness and brand perception, and spends enormous amounts of time and money trying to convince clients of the positive impact their work has on clients' brands.  While branding is definitely important, we choose to focus on the measurable aspects of customer interactions such as time spent on the site, pages viewed, registrations, and purchases.  We believe that if we optimize for those metrics, branding will take care of itself.  We once presented this concept to Amazon as "building their brand one book at a time".  Amazon chose instead to create a $40 million television campaign, and chose an equally expensive agency to create the ads.  A couple years later, Jeff Bezos must have remembered our earlier counsel when he killed the tv ads and redirected the money he saved to offer free shipping on purchases over $25. Amazon began investing in their customers, rather than in media buys, and they soon hit profitability.  And their brand is stronger than it's ever been.

Thanks for reading,

Michael

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