Got this email from a client yesterday:
I need your opinion.
I got a call from [local TV affiliate] and they offered to make me the exclusive [business category] recommendation on their website. For $149/mo, I would get a 3×3 banner on their webpage as their BBB approved vendor for my market’s clicks. What are your thoughts on this type of marketing?
Before I share my reply to R, it’s worth noting right away that signs point to an emphatic "no."
But it’s still a matter of valuation… how much does it cost… and how many conversions do you need to see a return?
Here’s what you do:
1. Ignore any spin and puffery the seller tries to place on their offer.
2. Calculate your average cost of new customer acquisition by dividing the amount you’ve spent on advertising in the past twelve months by your number of new customers over that same period.
So, let’s say our banner ad costs $149/month, and last year’s cost of customer acquisition just so happened to be $149.
That means you just need to average one sale per month from the banner, right?
3. Now you need to calculate what an average customer is worth over the course of her lifetime. That new customer you acquired is actually worth about $50,000 to your business through her repeat business and referrals over the next forty years.
So, you spent $149 to make $50,000… why not test out that risk, even if it’s a long shot?
But if you’re going to take the risk (and really, there are no sure things in advertising), you should:
4. Do everything you can to increase your chances of converting one of those magic click-throughs into a sale.
Here’s my reply to R:
Great question… the good thing about marketing like this is that you can measure its effectiveness in nearly real-time. I would say "yes," but I would make sure they give you 90 days to get out of it. By then, you should be able to see if it’s converting.
Are they agreeing to do your artwork as well for the banner? Optimally, you’d like it to feature your [current offer] and lead to a special page on your site (called a landing page) that talks about the [special offer].
Every time we change up radio, we’ll change up that banner ad to match.
That’s my $.02 or maybe even $.03…
Founder & CEO, The Imagination Advisory Group
Bestselling author of Good Company: Making It, Keeping It, Being It
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