Billboard Advertising in San Antonio

As a student of economics, I always saw it as my duty to enlighten people about what economics is really all about. I would introduce myself as an economics student, and the response 50% of the time would go something like this, “Ohhh, I’ll give my money to you - economics is all about making the dollars…”.

This is not accurate. Economics, at its core, is about understanding how incentives, opportunities, and constraints influence the decisions people make in the face of scarce resources.

You must think like an economist if you are going to be able to sort through the two types of advertising sales representatives:

The Two Types of Ad Representatives: The Qualitative theorist and the Quantitative decision maker

The qualitative theorist is an advertising professional who is very knowledgeable in his arena. Jim is the Qualitative Theorist (90% of all advertising sales people). Jim probably represents a particular type of media, whether it is newspaper, magazines, radio, television, internet, or even outdoor/out of home advertising. The qualitative theorist is very smart and very quick on his feet - he can tell you exactly how many impressions your ad will get, the cost per thousand, the monthly rates, production charges, and the showing your ad is expected to receive.

The quantitative decision maker will know who your competitors are and what your industry standard is in terms of advertising spent as a percentage of revenue. From this information your sales rep will be able to prescribe an ad campaign that will increase foot traffic to your store X%, and after applying your close rate, you will know how much additional revenue your ad campaign will rake in.

The qualitative theorist knows your demographic, he has asked you the right questions and knows where your customers lurk, and he can tell you how to use the medium he represents to reach your customers. Our hypothetical salesman even quotes you some planning rates which do not sound out of this world, and you think this could be a great investment for your company.

Well this sounds great, doesn’t it? Jim is intelligent, articulate, and well versed with his product. There is just one problem; Jim has not said a word about justifying the price he is asking. He has eloquently given a descriptive analysis of his product, but after he steps out of your office, you cannot figure out if this great product is worth the money he has asked for. Jim has missed the most important part of selling advertising, and it is thinking like a business owner. You want to know 1) What results you should expect and 2) How to measure the benefits of these results vs the costs.

A good advertising consultant will use quantitative tools to reach a quantitative decision. The good advertising consultant thinks like a business owner.

Your advertising representative must think like a business owner

Essentially, Jim left out the most important part of any business-related decision: a cost-benefit analysis. Why did Jim leave this out? It is not because he is a snake-oil salesman, it’s because he was never trained to think like a business owner. By sales standards, Jim is a good salesman - he knows his product, and he is skilled at relating it to his prospect. This is typically a killer formula to use in normal sales, but this is advertising.

…Advertising must be justified and held accountable if you are going to make a smart advertising decision. It is for this reason that I run billboard connection as a quantitative, value-added business practice.

Marsha is The Quantitative Decision Maker (10% of all advertising sales people):

Marsha knows what Jim knows. She knows her product and the features it offers, but she realizes that these are the attributes, not the selling points. The selling point must be deductively arrived at. Assuming that you have granted a media sales rep an audience with a busy person such as yourself, you believe that this person could bring in revenue to your company.

Make them prove it! A good salesman will want to know about your current revenues, your projected revenues, and your revenue sales growth you want to achieve with advertising. The salesman will be eager to understand how many referrals and repeat sales you receive per customer. The salesman will ask you about your close rate, and how many prospects it takes you to make a customer.

At first, these might sound like nosy questions, and I often have clients who balk at giving me these numbers, but it is critical to know if you expect to have any justification for the amount of money you spend on your advertising campaigns. Sometimes my clients feel more comfortable giving me ranges. I might like to know what their gross profit margin is, and I will throw out ranges so that they do not have to hand over their specific profit margin.

This sales rep takes a quantitative approach to your need (for increased revenue), and then makes a decision based on educated assumptions. No eloquent speaking involved, no “salesmanship” required. This is the type of advertising representative you can hold accountable.

Why choose the Quantitative over the Qualitative? Accountability.

Is your business experiencing the increased foot traffic Marsha told you it would? If not, you are able to set up a meeting to review the assumptions made about your ad campaign. Was your close rate as high as you thought it was (perhaps your sales folks inflated it)? Are you sure you are tracking all foot traffic (inbound calls, emails, walk ins, tire kickers…)? Are you competitors’ foot traffic as high as you assumed?

By dealing with a Quantitative sales rep you are able to reason together and determine if your advertising is paying off.

If you are dealing with Jim who sold you advertising based on its circulation, demographic targeting, or frequency then how do you reason together? There is no possible way. When you call Jim he will tell you, “Hey, there is nothing he can do, the advertising is doing it’s job - it is performing up to the standards I told you it would”. This leaves you frustrated, and it further reinforces the false illusion that advertising is a nebulous blob which cannot be tamed.

Your responsibility as business owner:

First, do some research on your own company. Explain to your sales force that you are thinking of embarking on an ad campaign and you need their honest feedback. Nail down an accurate close rate. Next, determine whether your estimated growth is realistic. Is it based on your prior trend? If so, how is your industry doing, what assumptions are you making? This will help you and your Quantitative Salesman.

How to screen for a quantitative salesman:

• Ask them how they plan to track the results of their ad campaign - see if they say anything about relying on your accurate foot traffic counts.
• Ask them what are typical reasons ad campaigns fail - see if they give qualitative or quantitative reasons.
• Ask them how much increased traffic you should expect from their ad campaign, then ask them to back up their answer.
• See if they have done their research, do they know how much your industry spends on advertising?
• Ask them what conversion rate you should expect from their advertising campaign (out of the people who see your ad, how many will walk into your store)

These are questions which I always make sure to answer for my clients before I start talking about features of outdoor advertising (such as the fact it has the largest reach and frequency for the lowest cost per thousand impressions)