Thursday, May 6, 2010

Predicting Return of Investment (ROI) of an Offline Marketing Program

I recently worked as a web consultant with Ultimate Construction, a San Diego based construction company that was interested in advertising in the two major Yellow Pages (produced by Verizon and AT&T) in the North County San Diego region but wanted to know if it was a good investment.

After talking to Verizon and AT&T's sales representatives and obtaining several figures (e.g. ad costs, expected number of leads, etc) and asking Ultimate Construction what are the companies average conversion rates (on leads and actual work estimates) we were able to clearly identify which company and ad size offered the highest value for his investment and which ones were completely unprofitable.

See the video and spreadsheet below for a quick explanation on how any small business can determine profitability of an offline marketing channel.  By using the spreadsheet template you can just plug in a couple of your companies metrics and some of additional advertiser metrics.

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