The Only Purpose Of Advertising Is To Make Sales

There is a big difference between advertising people remember, and advertising that is effective.

One of the best real world examples of this is to look at two Super Bowl Ads.  The first is the famous “Sock Puppet ad” run by pets.com during the Super Bowl in January of 2000.

This ad cost them 1.2 million dollars and was ranked #1 by USA Today and had the highest recall of any ad that ran during the Super Bowl.

The results?

The company announced they were closing their doors on the afternoon of November 6, 2000. Pets.com stock had fallen from over $11 per share in February 2000 to $0.19.

Advertising that wins awards and entertains doesn’t get you sales. Especially when there is no offer, and no immediate call to action.  Why anyone would spend that much money and not have an offer and a way to follow up amazes me.

The Worst Ad Wins The Super Bowl

Now, just for fun, let’s look at a Super Bowl ad that didn’t win any awards, was widely criticized by those in the advertising industry, and no one remembered after the superbowl was over.

During the Super Bowl this year, an ad was run by SalesGenie.com, a division of InfoUSA that provides leads to sales people and small businesses.

This ad was a pure direct-response ad. It’s ONLY purpose was lead generation. To drive people to it’s website for a free trial of their leads service.

 

 

To say that ad was not liked was an understatement.  Here’s what one ad ‘critic’ had to say:

“This spot is so monumentally brainless and amateurish it actually attracts attention—i.e., is this really a Super Bowl ad???”

And, Matt Creamer, editor at large at Advertising Age magazine called the Salesgenie.com a “low-rent ad.”

The results? According to Sales Genie, “We had more than 30,000 people come to our Web site that night. It has brought as much traffic to our site and generated as many new trials for the product in one day as it takes to generate in an entire month

It gets better…

“The phones were just ringing off the hook that night.” And the next day, there were over 2,100 phone calls and an additional 25,000 views of the commercial on YouTube.

And Salesgenie.com’s Web site market share rose more than 500 percent after the Super Bowl ads ran, according to Web traffic monitor Hitwise. It was the third highest market share rise among the Super Bowl advertisers.

And here’s what really matters, it made them money.

Over 18,000 signed up for their leads service.  If you estimate an average lifetime value of $1000.00 per customer (a conservative estimate for that industry) a little math yields $18,000,000.00 in revenue from the ad.

Not bad for a 3 million dollar investment.  To put it in ROI

18m / 3m x 100 = 600%

Put another way, they made 6 dollars for every 1 dollar they spent.

The moral of the story:

“The only purpose of advertising is to make sales.
It is profitable or unprofitable according to its actual sales.”
—Claude Hopkins, “Scientific Advertising”

Oh yeh, in case you were wondering… the Salesgenie.com ad was rated the least popular on USA Today’s Super Bowl Ad Meter.

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