From The Urbach Letter –
Reader's Question: I need to promote my business. But there are so many media choices. How do I decide where to advertise?
My Answer: The simple answer is to test all available media and let the marketplace vote with their dollars. Now, this may or may not be practical in your industry. However, if the "just try everything and watch what happens" method is viable, then you simply need to be scientific. Run the same ad in two places (i.e. different newspapers, trade journals, cable stations, etc.) and "key" it. Keying the ad could mean a different phone number to call, a different (even fictitious) person's name to ask for, a different color coupon, a slightly different offer, etc. Be fastidious about tracking your responses and tally them.
The main statistics you want to monitor are: (1) Cost per lead, (2) Percentage of inquiries converting to sales, and (3) Cost per sale. For example, radio station "A" might generate inquires at $8 each and station "B" might deliver inquiries at $12 each. If you only looked at cost per lead, the choice would be clear: run more ads on A. However, if twice as many leads that originated from your station B ad actually ended up buying from you (for example 40% instead of 20%), then your cost per sale figures are A = $40 and B = $30. Lower is better.
Again, the concept is simple. Be open to experimentation, be scientific, and watch your numbers. Try to only vary one thing at a time. If you're testing medium A versus medium B, don't run a different headline in each one. If you do this, you won't know for sure what caused the difference. Once you've found the better performing (that is, more cost-effective) media, then you can start testing other variables: headlines, offers, graphics versus no graphics, etc.
But this isn't really the answer to the direct question. If you have lots of media choices, or you are doing something intrinsically apples-to-oranges like Cable TV spots versus Val-pack, things become more complex. Now you've got to study the different media options and do some "due diligence" before you start spending money.
First thing you should do is request a "media kit." Call the paper or station and ask them to send you their advertiser's media kit. If it's a small local shopper paper or low-watt radio station, they might not do much more than fax you a rate sheet. However, most will send you quite a bit of detailed information about the marketplace they serve.
But... how do you relate all this information into "bang for the buck?" You can't. Not directly. Don't get too hung-up analyzing. Use the media kit information to confirm that you're reaching the market you want to reach. Just remember that the info is usually overly optimistic, and take it with a large grain of salt. Still, you can get a good qualitative sense of the relative penetration of competing mediums and gain some insight into your marketplace.
Of course, there's much, much more to this, and I haven't even gotten started on the really important stuff like how to negotiate off rate card. But that's for another day.