There are a few major reasons why ads fail to make a profit. Here are a few of the major reasons.
No Headline
If your store name is at the top of your ad, you have no headline. If your headline doesn't give an irresistible reason to read further (from the reader's perspective) the ad won't be read. Over 80% of an ads profitability is provided in the headline.
I experimented once by placing the headline in the middle of the ad. The response went from an average of $7,000 a month in sales (from that single ad) to Zero. Not a single sale from the ad.
Same ad. Same headline. I just put the headline in a place other than the first place the reader looks. The headline must grab the reader by the face and scream "look at me!" and "This is for you!". The headline must create enough interest, by itself, to make the reader want to read the rest of the ad. Otherwise the reader won't read the ad.
Advertising your store
This may be the single biggest mistake advertisers do. Nobody cares about your store. They may care about what's in your store, if you can make them want it.
If you were going to set up a friend on a "blind date", you wouldn't spend all your time telling him about the house she lives in. Your store is just the house that your products "live in".
You almost never hear "Look Honey, an ad for a store. Let's drive over to see what's inside".
Advertise specific products and build the desire for that product. That will get the people in your store. That will get people to call your business.
Letting untrained ad rep build your ad.
Some advertising reps are trained. But most of the training is in Graphic Design. They can make your ad look great. But graphic design won't sell anything. Plus, the same person is designing all the ads in that media. How will your ad stand out?
Imagine an ad rep that knew how to build a profitable ad for you. After you saw a profit from your first ad, how hard would they have to work to sell you the second ad? Not at all.
Ask your ad rep if they have read this book. If they have, now you can breath a "sigh of relief".
Placing ads based on budget
I keep hearing about someone's ad budget like it's written in stone. An ad will either generate a profit or it won't. If an ad generates twice it's cost, what should you do next? Run it again. If the ad does not generate a profit, you don't run the ad again.
If someone offered to double your money in 10 days, and you totally believed him, how much a month would you budget for this? 10% of gross sales? 40% of gross sales? $500 a month?
No.
You would invest as much as possible. And you would repeat the process as often as available, for as much as you could. About 2% of my gross sales is invested in advertising. I didn't pick that figure. That figure is just what I end up with after I repeat the ads that work, drop the ads that don't, and negotiate the ad cost. About 40% of our gross sales comes directly from our ads, mostly Direct Mail ads. Do the math. Our average ad is generating business at 20 times cost. Lots of trial & error to get to that point.
You budget expenses, not profit producing investments. The only complaint about my Direct Mail company (Town Money Saver) is that it won't run more than once a month. If it ran more often, I'd be there.
Thinking "Response" versus "Results"
Most ad reps talk about response. A response is when someone stops you on the street & tells you that they saw your commercial. A response is someone calling your store to ask your hours after they see your ad. A response feels like a result. A result is a sale and a profit directly linked to the ad. Responses are hard to measure. But that doesn't matter because responses aren't what you want. You want results. Results are easy to measure. A little later, I'll show you how.
Trying to Entertain
For some reason, some advertisers think they are is "show business". But entertaining gets in the way of selling. "Cute, clever, and funny" feel good to the advertiser because they are creative.
But being cute doesn't build desire for the product. "Clever" creates no demand for the product.
"Funny" is not a reason to buy now. I've seen clever ads that worked. But the "clever" part was icing on the cake. If "cute" conveys a benefit to the customer, and does it in the most convincing way, then use it. But "clever to show that you're clever" is a complete waste of money.
Mentioning a competitor
Never mention a competitor in your ads. If you say something bad about a competitor, you have wasted your money because nobody cares. Beating down a competitor's product creates no desire to buy your product. Mentioning a competitor in any other way is free advertising for the competitor. And isn't that a silly thing to do? The only time you compare yours to theirs is if they already own theirs. Why would you want to make the customer aware that they have a different choice? Silly.
Advertising "lowest price" only.
Using "low price" as a reason to buy is the weakest appeal. Everyone does it. The appeal is diluted because it is so common. And if your price is your only advantage (to the customer), then anyone can beat you by simply lowering their price. Lowest price" also means "least profitable".
Only 20% of the population make buying decisions solely on price. Why would you want to compete with everyone else for the least profitable 20% of your market? Advertise exclusivity, quality, speed of delivery, service after the sale, anything but lowest price.
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