A recent
study conducted by TIME magazine
shows that advertising rates have at
minimum doubled, tripled and even
more than quadrupled in cost in the
last 5 years, while response rates
have plummeted to an average of just
1/10th of what they were
just 5 short years ago.
For example,
if you once paid $2000 for
advertising and got 100 phone calls,
each call (lead) cost you $20, now
however that same advertisement
could cost you $4000 (or more) and
attract only 10 calls, each call
could cost you a whopping $400 –
sound too incredible to believe,
only testing and tracking will tell
you for sure.
With countless media
choices, media-fragmentation,
consumer cynicism and advertising
desensitization at an all time high,
it’s no wonder attracting new
customers is getting more and more
difficult and expensive. There’s no
doubt customer acquisition costs
have gone up significantly, and
unfortunately no indicators exist to
suggest that advertising rates will
be getting better any time soon.
Case in
point: Two short years ago I was
paying .10 cents per click on
google.com, today that same click
costs just over $1.50 – 15 times
what I paid 2 years ago. The Sunday
Tribune increased their advertising
rates by 10% over the last couple of
years and the Miami star newspaper
increased its rates by at least 3% a
year for the last 5 years, that’s
more than 15% (exponentially
speaking).
To cast an
even darker shadow over increasing
advertising rates’ consider that
readership or viewership of most
newspapers, radio stations,
magazines, TV stations and so on…
has been steadily and dramatically
decreasing over this same time
period.
The Sunday Herald
circulation for example has dropped
16% since 1995, the Orlando Sentinel
decreased by 6% in 2005 and
according to ABC on May 3, 2005
daily newspaper readership over the
last 4 years has decreased by 15%.
With an ever increase of TV
channels, web sites, blogs, and
satellite radio stations coming out,
it’s no wonder readership or
viewership has decreased per medium.
With more and more choices, each
fragment of the market gets a
smaller piece of the pie.
