A Quick Case Study

A good example of this is Phil Herman. Phil's original farm was a single subdivision in Dayton, Ohio, which he farmed exclusively through direct mail. The more successful he became and the more markets he expanded into, the more he recognized the need to add mass media advertising to the mix. In conjunction with his direct mail campaign, he began running ads in the Dayton Daily News and launched an outdoor campaign that found him on a prominent billboard in the area. He later began running TV commercials on local cable stations. Needless to say, direct mail is a costly method of reaching every homeowner throughout the region, so Phil has made the complete transition to mass media and no longer does any direct mail farming.

Evaluating Mass Media Effectiveness

Whether you're going to use mass media to augment your direct mail or if your situation dictates that you use mass media exclusively, there is a proven advertising formula that will help you evaluate your options. It's crucial that you learn this formula to determine how to get the most for your marketing dollar.

The CPM is the advertising industry's universal measuring stick to compare the cost of putting a message in front of 1,000 people. It's determined like this:

Cost of the Advertising

Consider Your Reach

However, an important caveat must be considered when evaluating mass media CPM. In mass media outlets, your reach, that is, the amount of people exposed to your message, may be larger than you need. If that's the case (and it often is), you're actually paying to deliver a message to a subgroup of the entire circulation of the publication. What this means is that to best evaluate cost effectiveness, you should recalculate your CPM using the smaller, subgroup number because the rest of the people to whom your message is delivered do not really matter to you.

Cable TV is a tremendous mass media opportunity. Cable TV companies often serve just one or two cities each, allowing you to deliver your message directly to those to whom it matters for a fraction of the price of broadcast networks. What's more, it still carries a large part of the cachet of traditional television advertising, giving you increased credibility and prestige.

Good Question, Difficult Answer

To recap, direct mail will usually be the core element of your marketing campaign. As you begin to grow or if you've been mailing consistently for two years or more, add new communities to your farm and your repeat and referral business grows, you'll want to augment your direct mail with mass media for optimal effectiveness. Once you reach a point where you need more targets to continue to grow your business, you will want to definitely augment and maybe eventually replace your direct mail with mass media advertising. It all depends on the CPM.

The best thing you can do for your career is to follow the guidelines we've laid out in this article and make a habit of calculating what will provide the best return on your investment. By doing so, you will stretch your marketing budget to the max, ensuring the greatest result for your dollar.