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The Magic Cafe Forum Index » » Tricky business » » ROI from advertising (0 Likes) Printer Friendly Version

NJJ
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What sort of percentage Return on Investment do you seek from advertising?

For example, if you book a $5000 yellow pages advertisments. How many dollars of bookings would you want in order to feel it was a worth while investment of your money?
LeeDillingham
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I've never figured out. However, my general rule is that I invest 10% of my gross income back into advertisng. From past experience, the yellow pages have not been a high ROI.
NJJ
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Lee - That's an interesting way of doing it.

My advertising at the moment is a)Yellow Pages which brings me 70% of my kid's parties (most of those were looking for me IN the pages) and b) my website. However, with my big move happeneing soon, I need to reassess my marketing stratergy.

I have Yellow Pages just as an example. I'm more interested in what is a good ROI.
ThePartyMagician
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Here in the UK, the YP marketing message is that for every £1 you spend on advertising with them, you can expect to generate £20 of business. It's not guaranteed, but it's a ball park figure.

That would mean your $5000 example should translate into $100,000 of business. Is that a realistic expectation?

I currently base my YP advertising on the basis that 1 show will pay for the monthly advert.

Best regards
Mike
Dannydoyle
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In America in general the Yellow Pages are barley better than waiting for your phone to ring at random.

ROI is a funny thing. When you book a show from the Yellow Pages, and then book a show simply from being at that show, then THAT is Yellow Pages ROI.

It is important to track these things. 20x ROI seems pretty high to me but I am not in the UK.

Nicholas your talking about a specialised market, in a country forign to many of us. A lot of the "general rules" we may apply, would certainly not be of any use to you. For example my Yellow Pages advice would be to tell them to stuff themselvs. BUT obviously that is huge wrong for down under.

Sometimes ROI translates in other ways also. Exposure that is favorable in cases, working closer to home, and lots of things also.

Good luck with the move.
Danny Doyle
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<BR>In a time of universal deceit, telling the truth is a revolutionary act....George Orwell
Neale Bacon
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I agree that the Yellow Pages are not a great ROI. I am listed there because I get a free listing for having a business line.

My best ROI is from my website.
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Al Angello
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The yellow pages is really scraping the bottom of the barrel, only bargain hunters purchase entertainment there in the USA. It is where the people who can't afford computers go for their cheapo entertainment. You will get many incoming phone calls, but very few of those phone calls will result in a booking. It may be a gold mine in Australia, but it is money wasted in the USA.
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NJJ
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I really didn't mean for this to be a thread about the yellow pages....

Regardless of the TYPE of marketing do you have a desired amount of income you want from your investment.

This should include Time and Money. E.g. Its costs $100 to send out letters but ALSO three hours of your time.

My ROI on Yellow Pages is about 7x!
My ROI on the last mailout I did is about 50x!
The last parent magazine I advertised in was 0x!

Or do you not measure this sort of thing?
magic4u02
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I do my main mailings to set up my season in January and February. from a process I now use with qualifying my contact list, I had last year an "oustanding" ROI and return rate of over 25%. I could not believe it. This was just from a system I set into place and from one main maikling and my 2 step follow up process. The 25% was not even just folks intersted in information, this was folks wanting to book my wife and I.

It certainly helped that I have spent a lot of time over the years studying, reasearching, learning marketing concepts and really learning about my market I am in and performing at. My entire approach and packet I send out is targeted to these decision makers to make it easy for them to see how I can solve a lot of the problems they are faced with.

Kyle
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Donald Dunphy
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Kyle --

Just a note. Response rate is different that ROI, which means return on investment. Not sure if you were clear on that. Your 25% response rate is not a 25% ROI.

ROI means that if you spent $100 to do a mailing (postage, envelopes, printing, everything), and you booked $1000 worth of shows, then you invested $100 to get $1000. Your ROI would be 10x.

In the case where I sent the thinking of you cards, with the Invisible Magic Dust in them, my ROI was about 12.5x. I spent $200 to generate $2500 worth of business. For every dollar I invested, it resulted in me earning $12.50.

Sometimes the ROI doesn't include the original investment amount (I can't recall quickly off the top of my head), because if you invest $1 to earn $1, then you aren't showing a profit. You only earn a profit when you make $1.01 OR MORE from investing $1.00

Hope I didn't make it more confusing. My intent was to make it clearer.

With a lot of ROI, people just look at the money spent, as opposed to time and effort invested as well. That is an important factor as well.

Nicholas --

My ROI for the parent magazine ad I run is about 5x. I don't think that my YP advertising is that high, probably closer to 2x. I am only guessing, but I do know that when looking for qualified birthday show customers, the ROI for the parent magazine was much higher than the YP ad, which is why I cut back a few years ago. To be honest, the only thing I closely scrutinize for ROI is mailings.

Then again, phone calls and targeted mailings can be active marketing, as opposed to passive marketing such as YP and parent magazine ads. The effort required to do passive marketing is less.

- Donald
Donald Dunphy is a Victoria Magician, British Columbia, Canada.
NJJ
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Thanks for the clarification Donald!

So what ROI do you need to consider a marketing program a success? 2x 3x 10x?
SeaDawg
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The answer is found in the law of excluded alternatives and the law of dimishing returns and time to recapture...

If you spend X on this program....How much and how long before I start seeing returns. When I can I start taking money to the bank.

Also I spent a buck and made $2, why don't I borrow a million and and make $2 million and pay back the million.... Easy to catch the logical fallacy there....

It really boils down to "How much work do you want and How busy are you."

As a previous newspaper editor, the print media folks are gonna hate this... but don't doit...No shelf life.

The web, business cards, flyers and word of mouth, referrals are all very cost effective.
Crazy people take the psycho-path thru the forest...
Donald Dunphy
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Quote:
On 2006-09-15 23:59, Nicholas J. Johnson wrote:
So what ROI do you need to consider a marketing program a success? 2x 3x 10x?


I think for me, it depends.

I may have an ok response rate, say 2x, but if it was a lot of work (and specifically unsatisfying work) to do the marketing, and also generated a lot of unqualified prospects as well as those few qualified prospects / customers, then even 2x might not be a good ROI. In this case, I might really want 5x or more to feel happy about my efforts.

However, if I enjoyed the work and generated some very qualified prospects / customers, then 2x might be a fine ROI.

For me, my YP ads weren't a lot of work to set up, but did tend to generate a lot of unqualified prospects, to find a qualified one. So, I cut back on what I was spending with them. However, the 2x ROI I still get makes it worthwhile for me to spend a little bit every month, to be listed in more than one category, and to list my website along with my business name and number.

It is important to remember that ROI is never guaranteed, but it is important to track. Here's what I mean by never guaranteed...

Sometimes throwing more money at something will not produce the same proportional results. If I invest $80 with a parent magazine for a small ad, and book $400 worth of business, that's good (5x). However, if I spend $400 with them of a full page ad, that does not mean I will book $2000 worth of shows (5x). Even spending more, I might still only book $400 to $800 worth of business (1x to 2x).

- Donald
Donald Dunphy is a Victoria Magician, British Columbia, Canada.
Dannydoyle
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Donald it is also a myth that you can track and have all the info you want with ROI, which is what makes it such a tough question to answer in a blanket fashion.

For example, the time of year you do certain marketing makes a HUGE difference in the ROI. At the wrong time of year, spend 10 times the money and ROI can be zip. At the right time of year half the money, and it is 10 times the shows.

Far more things go into ROI than most people think. Like I said, getting work from the work you booked, it is a HUGE spreadsheet when it comes to it. And quite tough to track. It is important to track, and a fantastic subject, just much bigger than most realise.
Danny Doyle
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<BR>In a time of universal deceit, telling the truth is a revolutionary act....George Orwell
Al Angello
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I have a friend who placed an ad in a childrens magazine at my request to obtain some more business, but he bought his advertisement in January, February, and March as a result of his poor sence of timing he got no new business, and told me I didn't know what I was talking about, so I try not to give advertising advise any more.
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Al Angello
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magic4u02
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Ads are a more passive format and I do use them effectively. I just prefer to use more active styles of marketing as I get a better response rate from it. Just my personal opinion is all.

Kyle
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Donald Dunphy
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Quote:
On 2006-09-16 11:03, Dannydoyle wrote:
Donald it is also a myth that you can track and have all the info you want with ROI, which is what makes it such a tough question to answer in a blanket fashion.

For example, the time of year you do certain marketing makes a HUGE difference in the ROI. At the wrong time of year, spend 10 times the money and ROI can be zip. At the right time of year half the money, and it is 10 times the shows.

Far more things go into ROI than most people think. Like I said, getting work from the work you booked, it is a HUGE spreadsheet when it comes to it. And quite tough to track. It is important to track, and a fantastic subject, just much bigger than most realise.


Timing is everything. It's one of those 4 "M's" I mentioned in another post a while ago. In this case - Right "Moment".

I would assume that Nick is talking about immediate ROI, as opposed to long term. With every new customer, there is a myriad of possibilities of repeat business, spin off shows, referrals, etc.

That why our business is best run through the view of "synergy". We market through many different ways that can add up to us being busy, or being successful in the way we want. And yet, it is important to know what is working and what isn't, to make course corrections.

- Donald
Donald Dunphy is a Victoria Magician, British Columbia, Canada.
NJJ
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Quote:
On 2006-09-16 12:46, Al Angello wrote:
I have a friend who placed an ad in a childrens magazine at my request to obtain some more business, but he bought his advertisement in January, February, and March as a result of his poor sence of timing he got no new business, and told me I didn't know what I was talking about, so I try not to give advertising advise any more.
HAVE FUN
Al Angello


I'm planning to advertise in a parents magazine starting Jan (when I move) but now I might think again....
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