How to Calculate Expected Response from a Newspaper Ad
Few people, including advertising professionals, know how to calculate the expected response from a newspaper ad. A newspaper circulation of 200,000 doesn’t mean 200,000 people will be contemplating your ad.
Here are the variables you need to consider when calculating an expected response from a newspaper ad.
1. YOUR TARGET
Every product has a demographic that represents its prime target. Let’s say, for the sake of this example, that your target demographic is adults, 25 – 54
2. MARKET SIZE
If you are located in a city of 1.5 million people and the 25 – 54 demographic represents 40%, then your target population is 600,000.
3. DURATION BETWEEN PURCHASES
Since people don’t buy every product they use every day of the year, the duration between purchases is important to consider. Let’s say people buy your product one time per year on average. Then, your available market in any month is 1/12 of 600,000, or 50,000. Of course, you’ll have to take into account the seasonal fluctuations for your product and apply the same logic.
4. NEWSPAPER CIRCULATION
If your local daily newspaper has a 40% penetration in your market, calculate that against your available 50,000 market to reach 20,000 possible qualified exposures to your message.
5. READERSHIP
Not every subscriber reads every page every day. Studies have shown that if you get 10% of the subscribers to read your ad, that is a very generous number. Applying that calculation to our example reduced the number of targeted customers to 2,000.
6. YOUR MARKET SHARE
Unless you have an exclusive monopoly in your market, you have competition with some customers who are loyal to them. If your overall market share is 10%, you can apply that to the remaining targeted customers, leaving 200 as your reasonable expectation.
7. RESPONSE RATE
Assume a 2% response rate from your ad.
8. RESPONSE
Your expected response (customers making a transaction) will be 4.
These numbers can vary wildly. However, the chain of logic remains constant. The offer, size of ad, weather, lack of or heavy competition, time of year and numerous other influences can have a bearing on final results. But, this model is useful to illustrate the realities of advertising response.
I agree with the numbers – I recently did a newspaper campaign and ultimately got 3 customers who signed up for a web site – from only 20 web site visits.
But compare this to a parallel campaign with google adwords where I had 20,000 impressions, 30 clicks and 0 site visits. Few people realize it is Pay Per Click on Google’s site not pay per web site visit to your site.
I have developed my own ‘demo’ advertising tool to allow customers to design and place their own block ads with newspapers. Like google adwords for classified ads.
http://www.adsbringcustomers.com
I am looking for newspaper partners (UK and US) to customize further.
Comment by David Morgan — October 10, 2009 @ 11:51 pm
I plan on placing an astrology Ad in the national enquirer that has a 11,000,000 readership amount. Based on the numbers above I shouls expect to get approximately 2200 responses?
1)11,000,000 X 10% who read my Ad = 1,100,000
2)1,100,000 X 10% market share with competitor = 110,000
3)110,000 X 2% response rate = 2200
Comment by Sandra Edwards — February 16, 2010 @ 1:33 pm
Hi Sandra,
In calculating your expected response, you’ve left a couple key steps out that could make a big difference. You have to take into consideration your target consumer. What percentage of the total 11 million circulation uses your service? Your calculation assumes that everyone purchases astrology services. I suspect that I’m being generous to assume that 25% of the readership is a target for your service. That alone would reduce your expected response to 550.
Next, there is no calculation for duration between purchases. If your target buys the service at least once per month, then you’re safe. But, if they buy every other month, then you must cut the 550 in half to 275 because only half your potential customers are in the market at any given time.
Finally, it looks like you may have calculated your market share by counting the number of other ads for the service you found in the enquirer. That is not your market share, it is your share of voice in the publication. Nationally, your market share is a fraction of a percent. You are in competition with hundreds, maybe thousands of others scattered across the country.
The thing I’d like to emphasize most, is that this calculation is nothing more than a reality check when it comes to making a choice whether to run an ad or not. The numbers can vary wildly depending upon a number of things that you have little to no control over. But, it is common for hopeful advertisers to expect results that are impossibly optimistic. This is just a way to put those expectations into a framework that exposes the realities of the market.
Rob
Comment by admin — May 3, 2010 @ 9:42 am
Thank you for the honest feedback. It helps to keep me aware of more realistic expectations. Any suggestions on what might be the best way to advertise my horoscope poems effectively?
Comment by Sandra Edwards — October 31, 2010 @ 10:33 pm