Comparing Effectiveness

Comparing Effectiveness: Traditional Ad vs. Direct Mail


First let's look at the Traditional Ad:

  • Shot Gun Approach
  • AD’s get less than 1% Response
  • AD’s have less than a 10 second recall if seen at all
  • ROI Analysis Example
    • Cost of ¼ Page Ad: $15K x 12 of Months = $180,000
    • Creative Cost: Copy + Graphics = $4,000 x 12 = $48,000
    • Total Cost: $228,000
    • Readers: 25,000 x 1% = 250 Leads
    • Cost Per Lead: $912.00
    • Note: 70% of all leads are not followed up on (Trade Show Exhibitors Association)
    • Hot Leads:15% or 37, Warm Leads: 15% or 37, Info Leads: 70% or 176
    • Clients Average Sale Value: $20,000
    • Lead to Sales Rate: 10 to 1 (PPI), Total Qualified Leads 74
    • Total Sales: $140,000
    • ROI: Negative-Spent $228,000 Got $140,000 Sales

Next, let's look at Direct Mail:

  • Spend 50% on AD and 50% on DDM
  • DDM Budget: $90,000
  • Target 1,000 Businesses
  • 30% Appt. Rate: 300 Appts.
  • 30% Proposal Rate: 90 Proposals
  • 30% Win Rate: 30 Sales
  • New Sales: $600,000
  • ROI: 6:1 First Year
  • ROI: 12:1 Second Year
  • Plan: 3 Part DDM, Budget $90 per Name, $30 per Mailing