Which of these marketing tools is most effective?
1. Google Adwords PPC
3. Direct mail
The truth is that the value of any marketing tactic can only be measured by comparing it to other marketing tactics. PPC, blogging, direct mail, or any other marketing tool is neither a good or bad use of your resources. It’s only better or worse than your other options.
Before making any decision about where to focus your limited marketing dollars, you first need to answer 3 critical questions.
Question 1: What is the opportunity cost of each option?
Opportunity cost is the return on investment that you can’t get from option B if you invest your money in option A.
For example, if you buy ad space in magazine A for a 150% ROI, but ad space in magazine B would have returned 200%, then your opportunity cost is 50%. Not putting your money into magazine B means you actually lost out on an additional 50% ROI.
How will you know up front what the return on any marketing investment may be? You won’t. You need to find out for yourself, which brings us to our next question.
Question 2: How much of your marketing budget will each option cost?
The lower the cost of any one marketing tactic, the easier it is to try other options to see which give you the best return.
If a Google Adwords ad campaign costs you just 2% of your annual marketing budget, you’ll have plenty of money left over to invest in other tactics. Since your financial risk is so low, you’ll still be okay if your experiment flops.
If, on the other hand, you invest 98% of your annual budget in a full page magazine ad, you’ll have almost nothing left over and no way of knowing if your ROI is good or bad compared to other options.
Question 3: How testable, flexible, and adaptable is each option?
Imagine you’re about to buy ad space in an annual trade journal. Once it goes to print, your ad will be set in stone, giving you just one shot to get it right. If your response rate is low, you can’t try a new headline or change the offer.
Compare that to Google Adwords, email marketing, and even your own website landing pages. Since they are so flexible, it’s easier to test your ideas, learn from what works, and improve your results.
Before you invest in static marketing like print ads, capitalize on dynamic, testable marketing tactics that will give you the insight you need to grow your marketing ROI.