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June 16, 2006

Per-Inquiry Radio Advertising Often Misunderstood

In the June issue of Response Magazine, Rus Sarnoff wrote a piece in which he advocates the retention of a consultant because of the "value of fresh eyes".

As one of his examples for when this fresh perspective comes in handy, Russ said:

"It always surprises me how even the most robust and well-seasoned media plans may overlook PI media channels including TV, radio, print, Internet and other newly emerging channels affording marketers opportunities for performance-based, no-risk new customer acquisition."

In my experience, there is a lot of misconception about PI advertising so I'd like to take this opportunity to chime in on what Rus has said, speaking specifically to the direct response radio medium as it relates to PI advertising.

While I agree with Rus that a fresh set of eyes usually provides some value, I think Rus' statement about PI advertising could confuse people unfamiliar with the details behind PI advertising. I think it's important not to minimize the drawbacks of PI advertising and focus solely on the promise of "no-risk new customer acquisition".

The main question I have for Rus is, is he referring to a media testing plan or a long-term media plan? Two problems I see with PI for the testing phase are:

1. Media outlets are less likely to air or place your ad with no substantiation of proven success. When paid ads generate profitable results it affords the media buyer much more leverage when negotiating a PI deal. PI/PO deals are a great supplement to a successful campaign, however if you are using it as a tool to gauge the opportunity of a campaign, it will take a long time to get information necessary to distill key insights that are needed to build and optimize that campaign.

2. With PI advertising in direct response radio, you cannot easily gauge response with a true CPL because most of the time you don't know how many spots actually aired, or in what dayparts. From a scaling perspective, it is very difficult to use the information to wisely build on what works and what doesn't. And that is the essence of successful direct response radio advertising.

Back to what I said earlier, PI can be a great supplement to successful direct response radio advertising campaigns. It's true that PI advertising is performance based and no-risk in this situation.

It is also true - and often overlooked - that the methodologies we employ to buy and manage direct response radio media is also very performance-based and as such are very low-risk. The reality is that this risk management, enabled by technology with analytics and processes built over a decade, is the essence of building large, successful direct response radio campaigns.

Quite often we're approached for PI services not by people who are looking to supplement successful campaigns, but by people whose campaigns haven't been successful and are looking to PI to provide some kind of profits. They're attracted to PI because of the promise of "no-risk new customer acquisitions". As I've said, that's not a proposition that the media outlets will take kindly to, nor is it one that is scalable.

I'd like to thank Rus for bringing up this topic as I think shedding more light on it benefits everyone.

Posted by Jeff Small at 04:30 PM | Permalink