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Why Reader to Advertiser Ratios are Important to Advertisers

article published on MarketingViews May 13, 2002

by Zsolt Kerekes, editor STORAGEsearch

See also:- article:- Aspects of Web Advertising
Press Release FAQ's, High-Tech Marketing Agencies
article:- Increasing Your Brand's Visibility by Search-engine Marketing
article:- Why Being #1 on Search-Engines is only the Start of Your Web Promotion
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Zsolt Kerekes - Publisher
Zsolt Kerekes, is the editor of STORAGEsearch
The number of readers divided by the number of advertisers is a useful metric to think about if you're looking at advertising. This ratio varies widely according to different markets and media, but for this discussion I'll just stick to the Sun and storage markets.

In the early 1990's (before there was a world wide web) advertisers had to make do with paper publications. At that time, we didn't sell advertising, because our publications were vendor neutral guides funded by reader subscriptions. But we did sell mailing lists. In talking to marketers both in the US and Europe, I got the distinct impression that most advertising wasn't cost effective at generating leads. That's when I first thought about the Reader to Advertiser Ratio as a useful way to understanding why.

A typical printed magazine covering the enterprise server markets would have a ratio in the range as follows. The unit of advertising would typically be an ad for one or more months.
  • UK Sun market, printed magazine:- in the range from below 50 up to around 200 depending on the publication.
  • US Sun market, printed magazine:- in the range from about 500 to about 900 depending on the publication.
If we look at the same ratios for a web based portal today, such as STORAGEsearch or the SPARC Product Directory, where the entry level classified ads run for a year, the ratios we get are:- in the range from about 6,000 to 10,000. That's about 10 times better than print. However let's remember that the costs associated with web advertising are typically an order of magnitude lower than print so companies which have executed well with their web advertising (like most of our customers) have tended to dump their print ads, at first cautiously, and then altogether.

The Reader to Advertiser Ratio does vary considerably for different web publishers. So it's a useful way of assessing the results you might get before committing to an ad campaign. If you want to go more deeply into this kind of ratio you should contact the publisher and find out the ratio in the product segment you want to advertise in. That's where things start to get interesting. But remember that nothing works as well as comparative testing, of real ads on real people, which should always supercede any theoretical analysis.

Of course this ratio is not the full story, because, as with print advertising, the more you spend, the more visibility you get. But it's a useful starting point.

Unfortunately web advertising has much in common with direct marketing, and we've all seen examples of badly designed, badly targeted mail campaigns which made a lot of money for the marketing agency but which didn't do any good for the client. So choosing the wrong portal and running ads which insult the intelligence of readers is a sure way to convince yourself that maybe print advertising wasn't so bad at all.

Another way to apply this kind of ratio is to look at expos. If you divide the total number of visitors by the total number of booths... That can give you numbers which are scary, especially when you factor in all the costs. So don't do it if you're the nervous type.

A good analytical marketer will already have an idea of the spectrum of costs for acquiring leads and customers through different promotion methods. You need more than one method, because customers vary in the way they want to be marketed to. But these kind of ratios can help you understand why some publications don't work as well as you thought they should. If the problem is systemic, i.e. a ratio that's vastly lower for one publication than another, and if you're getting poor results, then the ratio tells you that you're ALWAYS going to get comparatively worse results in that publication no matter how much you change the design and offer. So dump it, and be confident why it's the right thing to do.
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