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market-farming - Re: Advertising

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Subject: Market Farming

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  • From: "jay gee" <jgj23 AT mindspring.com>
  • To: "Market Farming" <market-farming AT franklin.oit.unc.edu>
  • Subject: Re: Advertising
  • Date: Sun, 08 Sep 2002 10:30:55 +0000


> How does the cost of advertising through insert mailers compare to
> newspaper advertising? Our market manager was complaining about the
> high cost of newspaper advertising, saying it was running at$16,000
> for the 4 months. Ouch! Are there other more effective forms othern
> than the mailers?

Adriana,

Costs vary greatly depending on who sends out the inserts
(more on this subject later). As for comparing the cost to
newspaper advertising, you need to do a little calculating
based on the size of your market area (see more about
newspapers at the end of this post). More effective
ways to advertise??? (see the end)

For example: Suppose a market draws on a local pool of
45,000 residents. If the average local family size is 3.0
residents per household, that means 15,000 households
plus some number of businesses. At a nickel per insert,
that yields a cost of $750.00 per mailing. At a dime per,
$1,500 and so on. To find out what the cost per would
be, the possible mailing entity must be contacted and
asked about their rates.

There is a reason I mentioned the fact that the insert
I receive comes with the utility bill. That has to do with
open rates and how utility inserts are looked at compared
to insert mailers such as Valpak, or other firms that send
out stacks of coupons and ads for local restaurants and
car washes. I would not recommend sending an insert
through a commercial coupon firm -- the response is
unlikely to be worth the expense.

If you have a local municipally owned water or electric
utility, chances are you can piggy back on their bill
mailing either through a direct appeal to the billing manager
or by following political channels. Municipalities often
communicate through their utilities because the bills
always get mailed and are opened and studied by
recipients. Your market notice will get the same attention
if it is a plain and simple appeal -- information, not hype.

If you are served by exclusively private utilities and
your bills now arrive with lots of inserts, you might
try a single mailing if the cost is reasonable, provided
the mailing includes a highly trackable offer that ALL
market participants are informed about in advance.
If the response does not pay for the mailing, don't
try it a second time.

What about newspapers???

Newspapers generally have suffering readerships.
Where twenty years ago, sixty percent of adults
read at least on daily newspaper, the last time I
looked at the readership rates, they were below
forty percent. This rose somewhat after 9/11
last year and goes up for special events, but
newspapers are having their problems, hence
their high cost -- even though newspaper ad
rates have become negotiable to retail advertisers
(something that never happened in the past).

Because newspapers no longer reach the
majority of the potential market, especially
younger people, their value is limited when
reaching out to find new/additional customers
to shop at a market.

More effective ways to advertise than insert mailers
or newspapers????

Depending on where your market is held and what
the size of the Standard Metropolitan Statistical Area
(SMSA) is where your market is held, one great ad
bargain in terms of cost and effectiveness may be
radio advertising. If you live in a large SMSA, say
a suburb of Chicago, Cincinnati or Lexington, the
rates for radio ads are going to be high because the
station signal reaches lots of people.

Farther out from the big cities, radio rates get darn
cheap and this allows advertisers to do a good
job getting their message out, provided the message
is appropriate to the market. As in every case,
you probably need to check out what is going on
in your region and the use of a single ad medium may
not satisfy the needs of the market for everything,
but that is why ad pros try different media until they
find what works best for a given situation. Then they
stick with it and make it work better by additional
testing.

I suggest you all do the same.

I hope that helped.


Jay Gee
not a farmer -- but interested in farming







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