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Direct Response Vs. Institutional Advertising
    If you want your advertising to work, you must use direct response advertising!

    What's direct response advertising?  Well, there's basically two types of advertising: direct response and institutional.

    Direct response advertising forces the consumer to make a response.  It asks for an action.  It tells the reader to do something, why to do it, how to do it, and when to do it.

    A normal direct response ad has one mission: either to make the reader buy something, request more information, or perform some other action.  But a call to action is always requested.

    Here's the components of an average direct response ad:

  • Headline that catches the reader's attention
  • Text (copy) that builds rapport with the reader
  • Benefits of what it is that you are offering
  • Call to action

    A direct response advertising is the only type that is accountable.  When you spend any money on advertising, you need to know whether an ad was successful or not, and what factors influenced the success or failure of the ad.  You can use tracking methods in ads (like placing an extension or department number after the phone number) to find out what response you're getting, and by using different tracking numbers, you can test different aspects of an advertisement and see how the response changes.

    So then what is this evil institutional advertising that I mentioned earlier?  Well, it wouldn't be very fair of me to call it evil, but in my book it is definitely a thief of money.  Institutional advertising, as the name implies, is used mainly by large institutions, or by smaller businesses who try to mimic large businesses.

    Institutional advertising has no call to action, it doesn't tell the reader what to do or why to do it.  Better known as "image" advertising, its goal is to build the image of the company in the eyes of the reader.  While that may sound great in theory, in actuality it has several fallbacks.

    For one thing, it has no accountability.  Since its goal is usually to be catchy, or cute, for the purpose of entertaining the consumer, and not to get them to take a specific action, it can't be tested.

    I've heard all the arguments about the importance of image advertising.  But you know what?  I don't buy it.  I've tried direct response, and I've tried institutional advertising, and I'll take direct response advertising any day of the week!

    Here's a well known advertising story.  There was a man who was a famous retailer in New York.  He once said he knew that 50% of his advertising worked, he just didn't know which 50%.  Well, if he was using direct response advertising, then he wouldn't have had this problem.


    There's another advantage for being a direct response marketer:  Your ad rates are lower.  Newspapers and other media sources normally have at least two rate cards: one for institutional advertising, and one for direct response advertising.

    Since direct response advertising is accountable, the advertiser knows how much each new customer is costing him, and the media companies have to lower their fees, since frequently a media source never brings in enough new business to justify the fees that they are charging.  So make sure when you advertise, you always ask for the direct response ad rates, and negotiate down from there.


    Advertising agencies hate me for this, but I recommend you stay away from them.  The vast majority of advertising agencies know nothing about advertising.  Say what?  Yeah, you heard me right.  80% of all advertising agencies are a waste of money.  The normal advertising agency hires college graduates with a degree in art.  These people are artists, not marketers!

    Look, all these folks know how to do is design ads that look really sharp, and win tons of awards.  I say the hell with awards.  The only award that I care about, and the only one that you should care about, is getting more business.  That's it!

    What advertising agencies are really good at is designing ads that appeal to the ego of the advertiser.  Remember, they make their money whether the ad works or not.  So their real goal is not to design advertising that works, but rather advertising that the advertiser likes.

    So once again, I repeat, stay away from advertising agencies and their glossy four-color, catchy, witty, advertisements.

    I can tell you from experience that I've gotten much better response with a black and white, customer oriented advertisements, than I ever did with "professional" four-color, sleek looking ads.

    If you do want to use an advertising agency though, make sure that you get an ad agency that specializes in direct response advertising.  See a sample of their work, and if you have any concerns about whether the ads are effective or not, fax them over to me and I'll give you my opinion.

    Remember, all your ads must to be direct response if you want to get the most bang for your buck. 
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