Testing for the advertising baseline: Can you do it effectively?

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Istock market testThis Business Marketing Institute posting by Eric Gagnon outlines some common-sense approaches for advertising/marketing testing, suggesting that direct mail and pay-per-click advertising offers the environment where you can consider, evaluate and improve your results through empirical processes.

Of course, you can never be sure that your current marketing plan will always be successful. But one thing that’s totally within your control is your ability to continuously test a wide variety of new marketing methods, offers, and messages as insurance against a falloff in response in any of your current marketing activities. This was certainly true when the economy was running smoothly, but now it’s imperative to use testing to keep all of your marketing options open.

He is right, of course, but there is a catch.The testing approach undoubtedly is effective if you are fortunate enough to have a business operating in the direct response space. That is, the clients see your advertising material, and then purchase (or take a strongly indicating action expressing interest) directly because of your marketing message.

You might be able to achieve these results if you are selling certain lower-ticket consumer services or perhaps some highly specialized training, consulting or specific product options. However, I’m confident that most readers of this blog have a somewhat different marketing environment. We either compete for work through RFP/tender processes, or engage in relationships over a prolonged period of stages, leading to often truly sizeable, but few in number, contracts.

Consider for example a general contractor who might work on two or three projects at a time, some of which could last many months or even years. The aggregate value of these projects can be huge, and individual contracts are in the hundreds of thousands of dollars or more. The circumstances here certainly do not lend themselves to advertising/marketing tests that would require, as Gagnon indicates, a sample test size of 2,500 or 5,000 names. Heck, that number is probably an order or two in magnitude greater than the number of potential actual clients for your services.

These observations naturally lead to a further consideration. If you cannot test something effectively, then should you not even consider the advertising opportunities from “testable” media such as direct mail, pay-per-click, or print media advertising?

I’ll allow for some bias here — after all, my business sells print and online advertising, and so I think it is worthwhile in many circumstances. However, I also know that these advertisements need to be seen in context and their value can be indirect rather than direct and immediate (and, as I’ve noted earlier, our value-for-money proposition relates to overall services we can provide our advertising clients, more than the singular direct response to individual advertisements.)

Nevertheless, your testing/empirical approach to marketing spending, whether it be advertising, RFP responses, association membership and the like, needs to allow for a long cycle time, with an understanding that in the AEC world, the highest results often arise through more indirect processes. You can test some pieces of the puzzle, but you will need patience for the bigger conclusions.

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