23 Jan Are Phone Books A Good ROI? (I Know It’s Crazy Right? But I Think I’m on to Something…)
The Resurrection of the Print (I Know It’s Crazy Right? But I Think I’m on to Something…)
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Here’s the first thing you’ll think when you click on this post. I haven’t used a phone book in years. None of my friends use phone books. Who in the blue hell still uses phone books nowadays? And for the most part you’d be right. Statistically more people are using their computers than phone directories. Statistically people are using their mobile devices more than computers. Therefore, the dominant searches done for a product or service is on your mobile phone.
This is why in my previous posts, we’ve talked about how important it is to have a well optimized website. Even more important than a well optimized website, is the ability to optimize your site for all tablet and mobile renderings. According to Google, your website will start to see penalties for organic results if your website does not have mobile renderings. For more information on tips and tricks for proper website optimization strategies, feel free to visit my post about “Started A Website? What’s Next?”
So why do I say that there is a resurrection of the print? They are correct when they say usage is slowing down. Why should I spend my marketing dollars on a medium that is shrinking? Simply put, the new return on investment and cost per lead from advertising in the directories have dramatically changed from a few years ago. Let’s think about it:
Companies like Dex Media, YP, HIBU, Homepages and a few other independent phone book providers have finally understood that the cost for a half-page, full-page and other ads are no longer worth what they used to be worth. Slow and ego-driven CEO’s used to consistently raise their costs on print instead of figuring out other strategies to use a small to medium size businesses advertising dollars more effectively. In all honesty, the reason behind this was the cost for publishing a directory is so little, there is more profit in a printed phone book than advertising on a website like Google, Yahoo and Bing. And large corporations who try to hold on to their profit streams for as long as they can without adapting inevitably shoot themselves in the foot and lose customers in the long term.
So what happened to these companies? Their CEO’s from the early 2000’s are no longer there and have cycled through a few a few bankruptcies. According to most of the large publishers earnings calls, they are losing customers at an alarming rate. This is mainly due to the high cost for having an ad placed in their directories and the value of that said product declining with limited other products/services to jump to or another company that can provide a perceived “better service” for those other products. Because of this alarming rates of decline, these large companies have finally decided (and wisely I may add) to repackage their directories and reprice their advertising cost to make it more affordable for the advertisers who would like to capture the 45 years or older demographic who have disposable income and still use directories. There actually is quite a market for this still.
So here’s where it starts to get interesting: Even if they are repackaging their directories and lowering the cost, the question remains, why should I advertise in a medium that is shrinking? Isn’t that a waste of money? I feel like I’m throwing dollars away and would better be served doing a pay per click or search engine optimization campaign for my business’ website. Let’s take a step back and think about what a business owner needs to know.
As a business owner, you should care about 5 things when it comes to marketing and advertising your business:
- What is my average new and existing client worth
- How many leads am I getting from an advertising medium
- What is my actual close ratio (Average of 10 calls how many do you close?)
- What is my cost per lead per medium used to advertise
- What is my cost per acquisition for the new client.
As a marketing professional working with over 300 clients in the Chicagoland area per year, my job is to place advertising messages in a multitude of mediums and track to see how well they perform. A business owner doesn’t have time to place these ads themselves, so having someone like myself to decipher all of their advertising in a 30-60 minute meeting using spreadsheets and tracking data. (Note to all business owners: If you are not tracking specifically how many calls you receive every month, you’re wasting money on something. If you can help it, don’t use the advertisers numbers they give you, use your own or buy additional lines.) As we look at this, I’m going to share with you one example of a company I’m working with on their advertising. This is not a one-off scenario, this has actually been becoming the norm for a lot of business owners:
This company is a seasonal business located the Chicago area. They advertise in two print publisher directories, their publisher’s internet campaign package and then advertises with another company that does PPC direct with Google. Here are their actual statistics:
If you notice, the highest amount of calls they received this year are from Google, Yahoo and Bing search engines, which is fantastic right? Everyone says they are finding you on search engines like Google, Yahoo and Bing so why wouldn’t I want to be on there? The answer is you should! It’s incredibly important to be on the major search engines! But think back when I talked about those five important things all businesses should care about when marketing their business. What is their cost per lead based on their advertising budget for those businesses? Search Engine Marketing is also the most expensive cost per PHONE CALL than the other mediums!
As a business owner, if you receive one phone call from a direct mail campaign, one phone call from a billboard, one phone call from Google, one phone call from a phone book and one phone call from a commercial on television, which is a better call? You received 5 phone calls and they are all important! There is no difference between the calls. But how much are you PAYING for each phone call? In this example, this advertiser is receiving the most calls from Google Yahoo and Bing but is paying almost 3-TIMES more for that one phone call than other traditional print mediums! Traditional Print company websites are providing HALF the cost of advertising on Google Direct! If you include the statistic that over 20% of all calls are solicitations, what is your waste per call? If you add in your close ratio (business close ratio usually hovers around 30%), how much are you now paying per new client?
It’s incredibly important to advertise your business on search engines. You’re getting the most volume amount of calls from these mediums. But in knowing that everyone is searching on google, all of your competitors are also flocking to these same engines. With only limited space on the front page of these engines, it’s incredibly competitive. SEO is growing harder and harder the more people are updating and optimizing their websites and the paid search auction price keeps getting driven upwards which in turn drives your cost per lead and cost per acquisition even higher. What used to cost $4 per click in 2014 now costs $5.52 in 2015 and will only continue to grow in 2016! Using this math, the cost per lead for search engines are only making the profit and the business owner is spending more money for the same amount or potentially less phone calls (if they don’t raise their budget year over year).
The smart advertiser knows that what truly matters in their business is their cost per call and cost per acquisition to develop actual ROI information. When you track your advertising, look to where you can lower the cost per lead down which will eventually save you money and make your company more profitable.
I have always been taught to look ahead into the marketplace and see where people are searching. It’s obvious that people are going to their computer, tablet and smartphones to find local businesses. But by the same token, if you’re looking ahead into 2016, you need to game plan alternative advertising strategies like website optimization or diving into traditional marketing like phone directories. Pay Per Click is only increasing in cost as the years go on and will eat into your profits due to spending more money for the same or less results. Directory advertising has the potential to drive down your cost per lead and make your business more profitable. The more people that leave this traditional medium means more of an opportunity to capture that. Combine that with the print companies lowering their ad prices dramatically makes it a very advantageous opportunity to seize market share.
The end of the conversation is this: the old adage is the same. Who is your client? How old are they? Now instead of the answer “everyone” and “anyone” be specific. Do they have disposable income? For the most part, business owners want to attract customers that are 35+ years of age due to that fact that they are finally establishing or have established a nest egg and the desirable income level. If you’re a smart advertiser looking into the future, it might be a wise idea to add an “blast from the past” piece of advertising into your marketing portfolio.