Note: I originally posted this on strongcaster.com, but I thought I would post it here as well, with a few modifications
Derek Sivers has a great story on his blog about a musician who booked an ad in a magazine hoping to convert 1% of the magazine’s readership into sales. In this case, 1% would have translated into 10,000 CDs sold. The result? 4 CDs sold.
He ends with this line: “He forgot there was a number lower than one percent.”
This story reminded me of when I owned my retail shop. We would place a full-page ad in the newspaper (with a coupon), hoping sales would pour in. The newspaper’s circulation was 20,000, so a 1% conversion would have meant 200 new customers. But sure enough, only a handful of new people would walk through the door.
Circulation means nothing without engagement. This is one of the reasons the newspaper industry is in such trouble; for years, businesses would throw money at advertising and hope it would make a difference. The problem is that, often, it didn’t.
This isn’t to say that print doesn’t have a place; there are many factors to consider, including the size of one’s target market, ad design, etc… The difference is that online you can measure engagement:
with a well-built website, you can track visitors, and what they're reading when they are on your site
a social marketing campaign can be measured for success based on blog posts on other sites, comments, tweets, etc.
an email newsletter can provide you with stats based on interests and click-throughs.
I recommend that businesses with yearly marketing budgets of $500-$5,000 spend most of that money building engagement online. When you compare it with print advertising, you will get a much better return on investment.