Why Advertising Does Not Work

direct response advertising

She walked in, dropped her thick leather portfolio on the desk, and asked the question.

I was expecting it. It’s always the same. 

What’s your advertising budget?”

I always provide the same answer.

There’s no end to my advertising budget.”

Her eyes lit up…

…until suspicion sinks in and she realizes that my little operation, which today is run out of a dingy cafe in Honduras, can’t possibly have a bottomless advertising budget.

Then I get the confused look.

Here’s the deal. As long as every advertising dollar generates a dollar in revenue, I will keep buying.”

The idea of measuring return on advertising dollars is foreign to most advertising sales people.  

It’s part ignorance, part burying their heads in the sand.

Here’s what they don’t want you to know

Brand advertising does not work for most small businesses.

Brand, or image advertising, is the advertising you see in most of the newspaper, magazines, billboards and TV. The content of these ads is the equivalent of a big, pretty business card. It’s what every advertising salesman tries to sell to you.

Big companies that spend fortunes on image advertising have different goals than you and I.

They will pay $4 million for a 30 second Super Bowl commercial to impress stock holders, board members and the media – not because it makes money.

Profit is NOT their primary concern.

As ridiculous as that sounds, as businesses grow into bureaucracies, politics drive decisions and common sense evaporates.

When impressing decision makers takes priority over sales, advertisers get their best designers to create award winning ads—awards judged by other ad designers.

But the only judge that matters is the one who buys your product or service.

If you copy what they’re doing, you’ll go broke.

How many decades and billions have Coke, Coors and Starbucks spent to create their brands?

Can you compete with that?

Real entrepreneurs, the ones who live and die by the bottom line, do not have endless budgets to waste on ineffective advertising.

And we especially cannot afford to use advertising that provides no way to measure if it’s working or not.

You Can Beat The Big Corporations,
But You Have To Play by a Different Set of Rules

Advertising salesmen push brand advertising because it’s usually all they understand. And an added benefit is that you cannot measure whether it’s working or not.

Salesmen are paid by how much advertising they can sell, not by how well it performs.

Entrepreneurs on the other hand, need ads to produce income, sometimes before the bad check clears that paid for the ad.

We cannot afford to wait years, praying our marketing dollars will build a profitable brand before we go broke. We need immediate results.

Your goal directly conflicts with the salesman’s.

You want to spend as little as possible.

They want to get as much out of you as they can.

We need it to work quickly. 

They want you to pay for as long as possible.

Consumer Buying Cycle

To replace unproductive brand advertising, we first need to dissect the Consumer Buying Cycle.

Rarely do people make their buying decision the exact moment they buy your product or service. There is an incubation period that happens before every buyer opens their wallet. That time period varies, usually depending on the cost of the purchase.

I recently bought a boat and during the months leading up to it, all I talked about was boats. I looked at boats online, bought boat magazines, asked friends their opinions and went to dealers for information. Finally, when I knew what I wanted and found a “good deal,” I bought one.

Buyers always go through a three step cycle before buying:

1.  Awareness

2. Research

3. Purchase

First something triggers the idea. Then they think about it for a while until they start researching and talking about it with others. Finally something motivates them to pull the trigger and buy. 

The length of the research phase differs depending how expensive the item. When buying a pair of jeans, the research phase is shorter then when buying a boat.

The important point, that almost every business owners misses, is that consumers are in the research phase the majority of time – particularly when investing in higher priced purchases.

Consumers are only briefly in the buying mode. But, if you look at the majority of advertising, it’s aimed exclusively at the people ready to buy.

To help explain, let’s assume that eighty percent of the time consumers are in the research phase and the other twenty percent of the time they are in buying phase. Doesn’t it make sense that at least some of your advertising should focus on that majority group?

If you ignore the buyers, you will obviously go broke, but at the top of your marketing funnel you should do something to lure in the browsers so you can later convert them into buyers.

This is why The Complete Marketing Blueprint focuses on building a high quality list of prospects who are interested in your product or service. 

With a list of people who have expressed interest in your product or service, you can affordably deliver follow-up messages to establish a relationship and build trust until they move from the research to the buying phase.

People are afraid to take risk, so it takes time and evidence before people will get to know, like and trust you. They want to feel safe before they invest their money.

Trying to accomplish all of that in a single brand ad is asking a lot, which is why we ditch single step brand advertising for a multi-step marketing system.

Click to continue …