Why you should be spending as much as possible on marketing…and how

Remember these words, “It’s Only Expensive if it Doesn’t Work”

Direct marketing professionals are a unique lot of folks who want match up revenues with advertising expenses, down to the penny! Or at least down to the dollar. Careful spending doesn’t mean minimizing the absolute cost of a marketing campaign. Yes, as the many financiers are always telling marketers, “Marketing capital is risky capital.” However, decreasing spending doesn’t eliminate risk. Planning and testing does reduce risk and increases the likelihood of success.

You may minimize spending but you may also minimize results as a result. Testing will prove results of a marketing effort at whatever spending level. For example, an envelope, letter and full-color insert is undoubtedly more costly to produce and mail than a 4”x6” black and white postcard. This has been real-world tested and witnessed. The more expensive personalized envelope mailing is more likely to pull a better response than the 4”x6” postcard.

So even if the net effect (ROI) between each format is a wash, the more expensive mailing piece may provide an added “branding” benefit. The more expensive envelope-letter-attractive insert combo may get recipients to spend more time with it and remember it.

Another example is the skyrocketing prices marketers are paying for Google, Yahoo! or MSN pay-per-click keyword campaigns. $3.00? 99 cents? 25 cents? What is the right price for a particular keyword? It depends on the performance of a keyword. Performance measured in click-through, conversion-to-sale, customer acquisition cost, or the lifetime value (LTV) of the customer acquired by this particular keyword on a particular search engine. Add to the fun, a well-performing keyword on Google may perform better or worse on Yahoo! or MSN. The only way to really know is to carefully plan the campaign, test the campaign, collect the data and report the results. The beauty of the Internet is that you have the technology available to you to collect data and report information. The beauty of direct marketing, especially on the Internet, it only takes relatively small amounts of money and time (days, weeks) to find out what worked and what didn’t work.

The campaign’s cost-benefit relationship can be assessed through proper testing of the list/media, offer, layout/visuals and copy. With our overburdened schedules and overwhelmed technology staffs this still can be a challenge to do, and to do well. If done right up-front, money and time will begin to free up because the marketing dollars and the marketing staff will be more efficient. So no matter what cost is contemplated for your next direct marketing campaign, find the will, the way and the tools to measure the benefit from that campaign.

And this is proven. When people see test and campaign results in black and white, they are hard to ignore. Opinions can be easy to argue with. Data is not.

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