FREE ADVERTISING!

The phrase "free advertising!" sends up the same cautious skepticism that Matthew Lesko garnered in the 80s with his "free money!" late-night advertisements. It turned out that many of the government grants that he claimed people could get were public assistance money, meaning that most people didn't qualify for it. The idea of getting something for nothing, however, is endlessly appealing to people.

I wouldn't have believed it myself, back when I was managing major national accounts and didn't know anything about the ways that I could get "Free advertising" for my clients. However, I've learned that this is indeed possible if you can move past the traditional marketing approach and ideals.


Traditional Advertising: Spend, Wait, and Hope


The typical product launch in the "consumer packaged goods" world will have a combination of televised and print advertising, and the marketing campaign for the launch alone can top $2 million. That means that, before a single package is sold, the product is $2 million (or more) in the red. Traditional advertising has a reputation for "spend, wait, and hope" because consumers often have to encounter your advertisement 7 to 10 times before they purchase, and even when they do, you cannot be sure which advertisement was the one that convinced them.

Luckily, there is a better way.


Direct-Response Marketing: The Perks of Tracking Your Marketing Clearly to MER


Direct-Response Marketing on TV is a simple formula: create an extended infomercial, where a different trackable number plays in different zones where the infomercial airs. Call centers then receive the direct responses (hence the name) from those who are viewing the infomercial and are interested in trying the product right at that moment.

Some of the benefits of this approach include the fact that you don't have to be investor-backed or a previously-successful company with piles of cash for ad spend. Rather, the marketer is selling the product immediately, so you know whether or not your product is making money instantly. If the numbers don't come back right, you can adjust many variables and try again, each incrementally spending till you hit the Media Efficiency Ratio (MER) you want. This means the ratio of dollars of product sold for every dollar of marketing spend. Typically, a profitable product must sell $2 of product for every $1 of ad spend, so work to hit that number or higher.

The reason for the exciting title of "Free Advertising!" is that, once you hit your 2:1 MER, every other impression your ad makes on people is essentially free. Think about it: plenty of people will view your ad, and just like the traditional marketing folks, they won't buy immediately. However, some people are buying immediately, and that keeps you in the black. Just by marketing your product, you grow and grow your revenue and profitability.


Billy Mays and OxiClean: Weathering the Powdered Bleach Competition Storm


Our experience with OxiClean is a great example of this effect. Clorox launched a competitive product, Oxi Magic, with traditional advertising in the heyday of OxiClean, and of course, all that glitz and marketing spend did have an effect for a while. However, the launch-level of ad spend couldn't be sustained, so as that trailed off, so did the sales of Oxi Magic. OxiClean, however, continued to have its recognizable brand personality, Billy Mays - we loved working with him and every time he did direct-response infomercials for us, OxiClean made money. They weathered the hit and eventually Clorox pulled their product, accepting that OxiClean was the winner. Rather than having to start out with big spends, OxiClean got to build its reputation over time with incremental spends that were always rewarded with immediate, trackable sales. The recognizability of Billy Mays and his enthusiasm? Well, OxiClean was getting that for free!


What Makes a Great Direct-Response Marketing Product?


Clearly, not every product sells well via televised direct-response marketing. Even now, the products that sell best with this method tend to be:

Incredibly unique - nothing else you can find in the stores.Priced under $50 - so that an impulse to buy doesn't get checked by a need to think about it a long time.Have a wide potential audience - you want a huge percentage of those who see the ad to think "that'd be perfect for me."Be visually demonstrable on TV - you want to be able to show everyone at home just how wonderful this product is.

Luckily, for products that fall outside that scope, there are now even more ways to get direct responses from your products.


Direct-Response of the Future: Facebook Ads and Instagram Ads


Harvest Growth has moved almost 50% of our business to social media advertising platforms; not only are they great places to test for trial-and-error before launching a TV campaign, but they are also wonderful platforms for sales in their own rights. With the unprecedented ability to target particular audiences with these advertisements and the excellent available statistics that show you exactly how well your ads perform, you still receive the benefit of a direct response, except now you don't need a call center for it. It is still important to get to that 2.0 MER, but getting there is possible through smart testing of your advertisements and constantly rethinking the best strategy to reach your perfect customers.

We've seen the most success with Facebook and Instagram so far; Amazon can also be incredibly helpful, though more so for products that people are already searching for than for brand-new launches. However, the principles are the same for these direct-response marketing avenues, and these principles will remain as the many channels for advertising continue to grow: make sure you know exactly how many sales are converting because of a particular ad exposure, make sure you know how much you are spending per ad exposure, and change any advertisement that isn't getting you that wonderful 2:1 ratio. Along the way, you'll keep getting "free advertising," growing your brand awareness while making money.

Want to learn more about how Harvest Growth can help you achieve the magical 2.0 MER and get your advertising "for free"? Contact us today!

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