BroadBased Communications: Marketing, Public Relations, Graphic Design

Perhaps a better question is do you calculate the return on your investment in marketing initiatives? If so, which method do you use? Below, we offer a variety of formulas commonly used in the marketing industry.

Each of the three formulas begins with the gross profit or customer lifetime value of the initiative. From that number, you subtract the overall cost of the marketing investment (this can vary by definition), and divide the resulting figure by the same marketing investment number. Since ROI is generally measured as a percentage, you will multiply that number by 100. For example, if the gross profit was $15,000 on a marketing investment of $4,500, the ROI calculation would look like this:

$15,000 – $4,500 = $10,500 / $4,500 = 2.33 x 100 = 233% ROI

Basic Marketing ROI Formulas

1. Gross profit (GP) for units sold:

Gross Profit – Marketing Investment
Marketing Investment

2. Customer lifetime value (CLV) instead of gross profit:

Customer Lifetime Value – Marketing Investment
Marketing Investment

3. GP or CLV minus marketing investment and overhead:

Profit  – Marketing Investment – Overhead Allocation – Incremental Expenses
Marketing Investment

For more information on how to calculate ROI, please email BroadBased CEO, Jan Korb.

Posted in Marketing Planning

A clear and cohesive plan will let you make the most of all marketing opportunities.

Yes, we said it: 2012. This year is more than half over, and as we find ourselves speeding toward Labor Day we are already working with many clients to budget for marketing activities well into next year. Maybe you have an existing marketing plan that just needs to be polished, eliminating those efforts that didn’t pay off in 2011. (How did those QR codes work out for you anyway?) Or maybe you need to develop a plan from scratch, complete with audience identification, goal setting, message creation, creative implementation, and results analysis.

The key benefits of developing a strategic marketing plan include:

• Developing a long-range view expediting decision-making.
• Building operating plans on market-driven research.
• Aligning and coordinating all efforts (print, web, radio, television, trade shows, etc.) to maximize efficiency and effectiveness.
• Identifying goals, measurement metrics, course corrections, and successful initiatives that should be considered in future marketing plans.

A clear and cohesive plan will let you make the most of all opportunities to promote your product or service in the marketplace – at the right time, using the right media, with a clearly defined product and the right promotion strategy.

Posted in Marketing Planning

In August, Google reported that the average click-through rate (CTR) for banner ads dropped to .09% in 2010, down slightly from .1% in 2009.

This data tells us that most banner ads need 1,000 impressions to result in ONE click through to your website. One obvious lesson is how imperative it is for advertisers to take advantage of any performance edge they can find to increase their odds of success. The chart below presents click-through rates for different size banner ads, both static and flash-oriented.

View more results information on Google’s DoubleClick Advertiser Blog.

Posted in Marketing Planning, Web/Interactive Development

With all the conversation about online advertising, marketers would be remiss to not include print advertising in the marketing mix. According to the Publishers Information Bureau, total magazine advertising revenue for the first half of 2011 increased 4% versus the same period in 2010. This marks the fifth consecutive quarter that magazines have posted increases in both revenues and pages, a trend welcomed by many.

According to The Association of Magazine Media three sectors exhibited double-digit page gains, driven by advertising for the following product categories:

• Toiletries & Cosmetics: cosmetics and beauty aids; hair and skin care products
• Automotive: domestic and foreign brands, driven by a mix of fuel-efficient/hybrid models, sports cars and motorcycles; also auto accessories and equipment
• Financial, Insurance & Real Estate: banks; investor consultancies and software; insurance firms

Joe White, publisher of Jacksonville Magazine, 904, Home, Bride and Taste magazines said, “Our numbers are up this year over last, both in ad pages and total ads. In a sluggish economy (where Florida ranks in the top four nationwide in unemployment), there’s something very encouraging about that. Of course, we’re a long way from the numbers of 2007. But we’re upbeat about the future of advertising in all our print products.”

“Despite the remarkable advancements in technology, advertising products and services is basically the same today as it was 200 years ago. In short, get your message in front of an audience. Technology has added new avenues to do that. But good old-fashioned print works the same as it always has. I can give all sorts of statistics and industry info to support that. However, I’d prefer to offer two simple truths we see here in Jax.”

“To every event we attend, host or sponsor, we bring copies of our publications. Very rarely do we bring those same copies back to the office. If given the opportunity to receive a quality magazine, the vast majority of people we encounter say, ‘yes, thank you.’ In addition, when we set up our Jax Mag party photo screens at a fundraiser, the line of people wanting their photo taken for the magazine starts to form almost immediately. People wouldn’t wait in line, by choice, if they didn’t see it as something worth waiting for.”

So remember, with all the online advertising options, print advertising remains a steadfast option.

Posted in BroadBased, Marketing Planning

You say your most recent direct mail effort resulted in a 1.25% response rate? And the click-through rate of your most recent Adwords ad was the same? Depending on your industry and audience, those numbers could be ample reason to toot your horn to the brass. Below, we present a compilation of common marketing response rates with which you can benchmark your own results.

Direct Mail: Depending on the industry, offer and the objective, typical B2C direct mail response rates are in the 0.5% – 1.9% range.  CRMTrends.com

Sponsored Links: The average Click Through Rate (CTR) for sponsored search engine links for all industries in 2010 was 0.051% – a decline from 2009’s 0.063%. The worst performing CTRs were for healthcare ads, which reported 0.011% CTR. 2011 Webtrends Report

Banner Ads: The average standard banner ad CTR stabilized at 0.09% in mid 2010. At that rate, your ad would need to receive 2,000 impressions to deliver 18 click-throughs. www.kikabink.com

Facebook Ads: The average Facebook ad CTR is 0.051%. www.kikabink.com

Posted in BroadBased, Marketing Planning

It was once thought search engine marketing (SEM) and search engine optimization (SEO) were strategies that should work independently of each other. But what marketers have come to realize is when combined, SEM + SEO make for one powerful tool.

Pay-per-click (PPC) strategies are an integral part of SEM. In addition to the “organic” search returns generated by your SEO strategy, “sponsored listings” are purchased via a Keyword bidding process. These are the ads at the top and side of organic search results. But why would you use a PPC ad? In addition to advertising a product or service, PPC ads can also be used:

• When organic SEO is not driving the desired amount of traffic to your website.
• When your top Keywords are too competitive for organic search to deliver satisfactory traffic to your website.
• To test the popularity of different keywords via click-through conversion. The resulting data can be used to help bolster your SEO efforts.
• To create immediate awareness of a new facility, product or service. You might try a PPC campaign when you need immediate visibility and don’t have the time for organic SEO to take its course.
• To generate campaign- or issue-based traffic. You might try a PPC strategy in the event that you want to create additional visibility for yourself as an expert resource on a timely topic such as a product recall.
• To boost employee recruiting efforts.

Posted in Marketing Planning, Web/Interactive Development

In July, Jan Korb, BroadBased’s CEO, delivered a presentation entitled Incorporating Pay-Per-Click Advertising Into Your Marketing Campaign to Florida Hospital Association public relations and marketing at their annual meeting. The presentation can be downloaded on SlideShare.

Posted in BroadBased, Marketing Planning

A frequent question we field from small and medium-size businesses is how much they should spend on marketing. This can be a tough question for seasoned businesses, and even tougher for startups.

While there’s no one-size-fits-all formula for calculating how much you should spend, we can offer some guidelines. The Service Corps of Retired Executives (SCORE) and the U.S. Small Business Administration (SBA) define the variable for a proper marketing budget to be between 2% and 10% of sales, noting that the total for business-to-consumer (B2C), retail and pharmaceuticals can exceed 20% during peak brand-building years. As an example, at 5% of gross, a company with $3 million in revenues would consider allocating $150,000 a year for marketing.

B2C budgets are generally higher than business-to-business (B2B) because the cost of reaching a large population through broadcast media can be quite expensive. B2B budgets are typically lower due to smaller target audiences and sleeker, niche marketing solutions.

Nailing down a number

Although many companies determine their marketing budgets as a percent of gross revenue, that doesn’t mean they pick an arbitrary number within the recommended range. So how do you arrive at a percentage that’s right for you?

Often, the percentage is determined by industry and size, so it’s smart to reach out to industry associations you belong to for benchmarking information. Additionally, many CPAs subscribe to research software and may be able to help you with your industry information.

What items belong in the marketing budget?

The fictional $150,000 budget set for a company with $3 million in revenues might sound like a lot at first, but not when you consider all that goes into it. The budget will support in-house marketing salaries, agency and public relations fees, media buys, printing, mailing, postage, trade shows, memberships, website, etc. So you can see how quickly the numbers add up. SCORE provides a handy worksheet to help you along on its website.

Regardless of how you arrive at the final figure for your marketing budget, it must be one that realistically supports your sales plan and returns an appropriate ROI. Depending on corporate goals, your budget may be 4% this year and 8% next year. And if you are new to the marketplace, you have to spend more aggressively to establish your business objectives.

Posted in Marketing Planning

As social responsibility issues have become a business imperative, the papers that companies use to communicate their message can be as important as the message itself. Wayne Dennis, corporate director of sustainability at Mac Papers, has developed an informative sustainability presentation titled ‘It’s OK To Print.’  With the following eight facts, he reminds us why paper is still a very important part of marketing campaigns.

• It’s 10% easier to read and 30% easier to understand words on paper versus words online.
• 30% less carbon is emitted to produce a newspaper for one person to read for one year than for one person to read online for 30 minutes.
• Electronics use 90% fossil fuels purchased off grid.
• An average of 78% of all power used by U.S. paper mills comes from alternative fuel sources such as wind and hydroelectric power. Some paper mills have been using green energy practices since the early 1900′s. In fact, French Paper has been producing its paper using 100% hydroelectric power since 1922.
• 98% of consumers bring in mail the day they receive it; 77% look through it that day.
• A person’s mood improves 26% by the touch of tactile printed paper.
• Print is viewed as trustworthy and objective; Web is viewed as timely.
• Print and electronic media work very well together (think PURLs and QR codes).

For more information, or to learn more about how Mac Papers can enhance your company’s image through effective paper sourcing strategies that promote sustainability and support your business goals, email Wayne Dennis at Wayne.Dennis@MacPapers.com

Posted in Marketing Planning

In January, the National Association for Printing Leadership (NAPL) forecast that printing industry sales are expected to grow 1% to 3% this year. The forecast, included in NAPL’s  State of the Industry Report indicates the first growth for the industry in four years. While this news is great for printers, the positive outlook still leaves 2011 sales 18% below pre-recession levels.

Posted in Marketing Planning