Media Math (That Matters) Can Be a Real Competitive Advantage
Plus: A broom tops the charts, and how to make deluxe offers seem cheaper
In my last newsletter, I took a break from writing about marketing to share some wisdom on finding new products. This week, I’m going to dive into a third topic that is another of my key areas of interest and expertise — media math. Don’t worry: You won’t need a calculator or spreadsheet to benefit from this article. We’ll keep things directional, starting once again with some wisdom from one of our Masters of Marketing.
Old Gold🪙
Joseph Sugarman is our ‘go-to guru’ for this topic because he produced some of the most detailed books on direct-response advertising ever published. The relevant series here consists of three books, all with the word “secrets” in their title.
The book I’m citing today is the third volume, Television Secrets for Marketing Success. In the back of that book there appears the following template:
True to my word, I am not going to get into a detailed discussion of these numbers. What I want you to notice instead is that this isn’t a typical P&L. First, it really only takes into account the direct expenses of this particular project. There’s a line item for “general and administrative” expenses, but otherwise there is no real attempt to include company overhead in any serious way. That’s smart. Company finances can be quite complicated and operate on completely different reporting schedule than advertising campaigns, especially during their testing and building phases. Trying to estimate and include company costs would only confuse matters and hinder decision-making. In short, DR campaigns should stand or fall on their own.
Second, you’ll notice this worksheet is missing a major expense: the cost of media. It should really be titled, “Figuring Out Your Profits Before Media.” In other words, the “profit on a single unit” number reflects the amount of money you would have left to spend on media once you had accounted for all other (direct) expenses. Many DR marketers, myself included, call this number a “break-even” — meaning that if you spent that amount you wouldn’t make money or lose money. Sugarman uses the term “allowable,” by which he means you would be ‘allowed’ to spend up to the amount shown on media.1
Why is the number calculated on the basis of a single sale? Because that’s how direct-response metrics are typically expressed. For example, the cornerstone metric in the DRTV world is the “CPO” or (media) cost per order. Other people use CPA (cost per acquisition) or a similar metric.2 Regardless, the point is that your worksheet should generate a break-even/allowable number that lets you put this main metric in perspective. In Sugarman’s example above, we’d want to know if our media cost was above or below $29.26 per unit. Below that amount, we’d be making money. Above it, we’d be losing money.
All of this may seem simplistic from an accounting perspective, and that’s really the point. When you get a media report from your agency, you want to be able to tell at a glance whether your media is working or not — and to what extent. Experienced marketers who are very familiar with their metrics can even look at an initial result and know instantly whether they should cut bait, cut back or get more aggressive with their spending.
In that sense, knowing your marketing math can be a real competitive advantage.
Choose products with better odds of success. ✅
Create cost-effective commercials that sell. ✅
Use smart media math to make more money. ✅
SciMark can help you accomplish each of these. Email me to find out more.
Chart Watch👁️
Helio Air Broom
Pitch: “One pass gets it all”
Offer: $29.99 for one with dustpan and mini version
Marketer: IdeaVillage
This project first tested in June of last year, but it didn’t break into the DRMetrix Top 10 until June of this year (i.e. the end of last month). It is now sitting at #4 in the nation and represents the first rollout campaign IdeaVillage has had for a non-brand product in … nearly five years, according to my records. That is to say, it’s the first product not called Copper Fit, MicroTouch, Yoshi or Flawless.
I was surprised by the choice since this category has been terrible for DRTV. The True Top 50 section of my “Hits Database” (available free to all paying subscribers) goes back to 2010. When I plug the word “broom” into the search function, I get only one hit: Telebrands’ Hurricane Spin Broom (which wasn’t really a broom). As for actual brooms, there are several tests that never went anywhere. These include 2022’s Aero Blast Broom and even a 2017 attempt to bring back the one big hit in this category: Telebrands’ One Sweep (1999-2000 and 2004-2005). No dice.
I guess we’ll have to wait and see what IdeaVillage has in mind. So far, so good.
(Note: The links above will only work if you have access to The Library of DRTV, my online archive of DRTV projects going back to 2007. Want in? Simply upgrade to paid using the button below. It’s just $5.99 per month or $59 for the year — an 18% savings!)
Fun Fact🧠
Experienced DR marketers know that just having a “deluxe” version of a product can significantly increase your average sale. But here’s something you may not have known, courtesy of Thomas McKinlay’s Ariyh:
The example above is at a higher price point, but McKinlay suggests it will work for lower price points as well. In his example, he uses donuts:
You run a bakery and are introducing new bran muffins targeted to health-conscious customers.
All that’s left now is to decide the pricing. You want to encourage people to buy bigger quantities - how do you nudge them to buy more?
You narrow it down to a final price, and two options of how to frame it:
6 muffins for $10 and a dozen for $15
6 muffins for $10, make it a dozen +$5
…you should go for the second option.
You can read more about the 2019 research that resulted in this finding here.
Not to get too technical, but “break-even” and “allowable” are not synonymous terms because some marketers build a profit or loss into their allowable. For instance, because of retail sales you may be able to lose X dollars per unit on direct sales (i.e. subsidize your media spending). In that case, your allowable would be higher than your break-even.
When I started selling on Amazon, I was introduced to the key metrics ACoS (advertising cost of sales) and TACoS (total advertising cost of sales). The first thing I did with those numbers? Develop a worksheet that calculated my break-even ACos/TACoS to put that metric in perspective.