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On The Price Is Right, contestants are rewarded for knowing the value of random items without going over the actual price. Most of us know the prices of items we purchase regularly: a gallon of milk, a dozen eggs, a gallon of gas, a postage stamp. More important, we have learned by personal observation how long a gallon of milk will last us, how many gallons of gas our car holds and how many fill-ups a week we need. But when it comes to media, all prices seem high and arbitrary.
The fundamental truth is that all media can be counted. The discipline of marketing is a science, and spending on marketing is an investment that pays returns. As a science, media can be measured; as the steward of your business, you must understand the media you use in your marketing endeavors and be able to account for it.
The term "media" means any marketing channel used to reach your best customer type. Effective media types may include newspaper, direct mail, radio, television, magazine, outdoor billboards, Yellow Pages, the Internet, and others.
Measuring Media
As a business owner in the hearing services category, you should be tilling at least 10 percent of your gross sales back into marketing. It is no secret that you have limited funds to invest in patient outreach activities and that you want every dollar to "get traction." During any given week, you have advertising salespeople call with "urgent" opportunities. Good stewardship means you have a scientific method for weighing these media opportunities and saying "yes" only to those who pass a simple four-point test:
1. Is the circulation audited?
2. Is the cost per thousand reasonable?
3. Does the media's demographic reach match my best customer type?
4. Is the media's circulation area the same as my trade area?
I visit clients in the United Kingdom a couple of times every year. The money exchange is humbling, as is filling up a car with "petrol" sold by the liter. But with a little math, I understand that when I spend a pound, I am spending $2 and that petrol bought by the liter costs $9 a gallon. Once I understand what I get for my money, I am able to plan and move on, putting the UK economy to work for my purposes. Understanding media is similar—you need to know a few data points to measure so that you can translate your transactions into meaningful information.
Every media has a measuring system. For instance, newspapers use audited circulation; television programs use Nielsen Media Research, measured in points; radio uses Arbitron Radio Ratings, also with points; billboards use an average daily traffic count. As a rule, you shouldn't buy anything you can't measure.
By definition, stewardship means you can give an accounting for how you spent your budget. Most media spending should be objective, not subjective. Objective spending is buying a medium that meets a set of predetermined countable criteria, allowing the buyer to compare cost per thousand between several media choices. An example of objective spending would be purchasing a Nielsen-rated television program after comparing this choice to other choices. A subjective expenditure is buying a medium that is not measurable and cannot be compared using a cost per thousand analysis. An example of subjective spending would be a local radio station that is not rated by Arbitron and claims to have a huge audience. The sales rep cannot quantify this claim, and the buyer has no way to divide the cost by a quantity of listeners to calculate a cost per thousand. The owner/operator who makes this buy does so based on a "good feeling," not on a quantitative analysis.
What's the Real Cost?
Just as you can't drive a car in the UK without buying petrol, you can't do business in the United States without buying some kind of advertising. But you must make your chosen media work for you. Effective mass media is a salesman that will greet your prospects every morning over their coffee—without fail! It never gets sick or has a bad attitude. It is always on time and on duty, giving your practice opportunities to become a familiar and friendly institution.
I often hear, "I don't advertise in the daily paper or on TV because it is too expensive." Actually, this is an erroneous statement because, although the unit cost may seem high, the cost per thousand is usually very low. When planning media to reach the age 65-plus prospect, several measurable methods should be considered. Each method must be converted into a "cost per thousand" value. Then, a comparison of efficiencies can be made. For example:
• Daily newspaper: 62,000 daily circulation. A 3 column x 8" ad costs $1,388, or $22 per 1,000 people.
• Jeopardy TV show: 28,200 circulation. A 30-second spot costs $350, or $12.41 per 1,000 people (likely to be seniors according to Nielsen data).
• Direct mail: 1,000 people on mailing list. A mailer costs 60 cents per piece, including postage, or $600 per
1,000 people.
Newspapers
Mass media newspapers and magazines have either paid circulation, which means subscribers pay for a subscription to the publication, or "unpaid" circulation, where subscriptions are free. Either type of circulation can be audited each year by the Audit Bureau of Circulations (ABC). For my money, I never want to buy media in a newspaper with unpaid or unaudited circulation. People who are willing to pay to receive a newspaper are valuable—we assume that they want the paper and may read it. Actually, statistics show they read about one out of five they receive. On the other hand, a paper that is thrown in my driveway that I didn't expect or request is the print version of spam. After I run over it for several days, I usually pick it up and throw it out, unopened.
Every market has its share of papers that substitute the words "readership" or "distribution" for the word "circulation." These are creative efforts by the newspapers to trump up their numbers and disguise the fact that readership is declining. "Readership" can be three times the actual circulation number. The paper reasons that its publication will be read by everybody in the home. "Distribution" is just the number the paper prints and puts out in breezeways in local restaurants, convenience stores and "Free: Take One" racks. This is not circulation. You have no idea how many were actually read or how many were thrown in the dumpster at the end of the week.
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Two more points about newspapers: First, as part of the ABC audit, the newspaper can tell you what percentage of their circulation is 55 and older. This number can be 40 percent to 50 percent of the total circulation. This will affect your cost per thousand, but even so, the cost to reach one customer will be cheap. Second, always consider buying a zone, which is a subset of their whole circulation. Your newspaper ad representative can bring you maps of the paper's established geographic zones.
The good news for today's dispensing audiologist is that daily newspapers—with readership down 3 percent and falling—are still being read religiously by the 65-plus age group. So, at least for now, the daily newspaper makes sense to include in an audiology practice's marketing mix.
Television
TV is easy to understand if you know about three key data points. Television salespeople will quickly find you after you start advertising in the newspaper or radio market. Ask to see a "ranker" of programs that do well with the age 65-plus demographic. Broadcasters use a Nielsen computer program to sort this data easily. Also, most local libraries have last quarter's Nielsen Rating Books, but these are as much fun to read as stock reports, so get the ad rep to do it for you.
There will be points beside each program. A point equals 1 percent of the people in your desired demographic of people aged 65-plus. For example, one point in a market with 60,000 seniors is 600 seniors. A program with a 4 or 5 is good for daytime television. A show like Wheel of Fortune may have 18 or 20 points. This number represents the number of people viewing that program on one day. To get the actual number in thousands, multiply the points by the number of "Households Using Television" at that time ("HUT Level"). The good news is, you won't have to calculate this number yourself—the station rep will probably include this number on the report.
Now you need to know how much the program costs. This too will be on the report. But there is absolutely no way to know if television is a good marketing option for you until you analyze the "cost per thousand" value. This is also easy. Tell your ad rep that you want to see a "Cost Per Point" and a "Cost Per Thousand" tab on the report.
The cost for a television spot may seem high, but actually television is usually the lowest cost media for reaching your prospects. Be aware that one station may not be enough; complete the above exercise for each of the network stations in your market. Ask to see a coverage map, which will help you see if the station is "spilling out" into areas not part of your market. In many cases, this will be the reason you will decide not to buy television.
On the subject of TiVo or digital video recorders: Don't start worrying yet, as this technology is not hugely popular with the 65-plus demographic; I predict you have 5 years grace. With television, consistency and frequency is the key to success. Get a pattern going and stick with it.?
Radio
Radio is very similar to television. The ratings company is Arbitron, and the audience is measured in "Average Quarter Hour." We always start by asking the station, "Who is your core demographic?" If a salesperson proudly tells you the station reaches people aged 18 to 54, you know this station will not reach your core target. And you don't want to pay for people who are not in your target age demo. You want to consider stations with programs that do well in the 55-plus demo. These programs may occur during drive times (the news), be personality-specific (Dr. Laura), be a music format (Music of Your Life), or religious (Hymns We Love). The key is to ask the sales representative for average quarter hour figures for all of their programs: You want to know how many thousand people age 55 and better are listening during any average quarter hour at a specific time.
When you are able to find a significant quantity of people, look at the cost for a commercial and divide by the thousands who are listening. This cost per thousand number allows you to compare value to the other methods of reaching those same prospects. Again, look at the coverage map and be sure it is a good match for your business. You don't want to buy people who are not in your trade area.?
When a station doesn't subscribe to Nielsen or Arbitron, you can usually get this data from their competing stations. Don't be afraid to ask; usually the stations with the largest market share will subscribe to these services, and they are benevolent toward their competitors. And unlike many professions, television and radio salespeople know each other and usually see each other at ad luncheons once each month.
Be Web Watchful
Television stations and newspapers have established Web news and information sites and are selling ad space on these sites as "exclusive" opportunities. For example, they promise they will have an ad or a link to a page for only one dentist, one car dealer, one audiologist. The stress starts when you hear the large number of "clicks" they say they are receiving... 110,000 per month—WOW! One such offer we reviewed recently quoted a price of $2,000 per month for a 12-month contract. The first question to ask: Who are these clicks coming from? If they are all 65-plusers, then it would be a bargain. Just calculate the cost per thousand and make your diagnosis; then, of course, you'll want to compare this to other ways you could spend that same $2,000 to reach your demo.
The truth is that there is no way these Web sites can quantify the clicks. So your bottom-line question needs to be: "How much does it cost to obtain one new patient? Let's say that number is $200, which would be great in most areas. Then that quoted price of $2,000 per month would need to result in 10 sales per month. In my opinion, that is too tall of an order for a medium where we can't count seniors.
The day will undoubtedly come when the Web will be able to identify the source of site clicks. For now, small business owners should utilize advertising media that can ensure their audiences. Combining good demographic information with meaningful cost analyses will help you get the most for your marketing dollar. |
