November, 2014
Inspection News and Views from the American Society of Home Inspectors

Principles of Discretionary Advertising



By Alan Carson – Carson, Dunlop & Associates Ltd.

There are many ways to spend money on advertising. In this article we’ll look at discretionary advertising.

Discretionary advertising includes things like print, radio, TV (cable), billboards, buses, bus shelters, benches, and, of course, the Internet. Print advertising may also include ads in newspapers, magazines, newsletters, and information folders.

Before we go too far, let’s stop and focus on our targets again. Some advertising is primarily for home buying consumers, and some is focused on real estate agents. Some can be effective with both groups, but never lose sight of your target group in any advertising.

Advertising to prospective homebuyers is expensive, so focus your efforts. Daily newspapers are costly because they reach so many people. While advertising here will reach many readers, most of them will not be buying a home. Community newspapers, often published monthly, are less expensive and target neighborhoods rather than entire metropolitan centers. But these, too, touch many people who are not buying or selling homes.

Radio, TV, and billboards have the same disadvantage. They are not targeted. While broadcast advertising to the public can be effective, it takes longer and costs more to achieve success.

So what other options are there? Let’s think as a homebuyer.

Where do people go when they are looking to buy a home? Real estate newspapers and magazines are a logical choice. While we said that daily and community newspapers are not focused on your target market, many of these have real estate sections that are targeted to your market. They may not publish a real estate section in every edition. Many have a real estate section on Thursdays and Fridays, for example. These target the people you are trying to reach. Because they will also be read by real estate agents, make sure your message here will be suitable for the homebuyers you are concentrating on and the real estate agents who will happen to see your material.

Real estate websites and other forms of online advertising are also logical. Online tools such as Facebook and Google advertising allow companies to target potential clients based on what they are searching for. For example, people looking for real estate professionals, lenders and lawyers may be a good target market to advertise home inspection services to. Social media also plays a big role. Seek out an online advertising specialist to further delve into this deep and ever evolving topic.

How Much Do I Spend?

Many people use a percentage of sales as a yardstick for how much to spend on advertising. We often see numbers ranging from 3 percent to 12 percent. We think there is a better way to figure this out, but it takes a little work. We view advertising as an investment and like all investments, you should be looking for a return. If you find an advertising tool that provides a consistently positive return on the investment, you should borrow money and do all the advertising you can possibly do. The trick here is that you have to do some work and measure the performance of the advertisement. We’ll talk more about measurement later on.

How Long Do I Have to Run An Ad?

Generally speaking, the longer you can run ads, the better. Many successful ad programs run continuously, although the ad itself changes. The logic is sound. If the ad is generating a good return on the investment, why would you stop doing it?

The First Results Will Take Time

Many people run ads once or twice and, when they do not generate sales, drop them, concluding that advertising does not work. This does not make sense because ads must be repetitive to be effective. Very few people completely understand any message the first time they hear it. And fewer still retain the message for any time, even if they understood it. Ads have to be repeated several times so that people understand the message, and then repeated persistently to help them retain it. Many professionals recommend, for example, a minimum of ten exposures for any print ad before trying to evaluate its effectiveness.

How Often Do They Have To Change?

We just talked about repetition being necessary for ads to be effective. Why would we ever change them? While repetition is key, ads to the same target group do get stale after a while. Depending on the medium and the target audience, many suggest that ads should change after 35 to 50 exposures.

With home inspection ads, we suggest a different approach to ads that reach out to homebuyers than ads directed to real estate agents. We may not have to change the ads directed at homebuyers because people are only homebuyers for a few months at a time every five years or so, on average. The ads will not become stale to homebuyers because the target group changes every few months.

Real estate agents, however, stay in the market and are targeted over a longer period. Ads to this group should change from time to time. You can keep a consistent message about your home inspection service, but change the ads. Home inspection ads may include a dramatic house photo or illustration of a problem. It may be enough to change the photo or illustration periodically and leave the text unchanged.

Some parts of your ad will never change. Many inspection companies have taglines that are part of their image. Here are examples:

• ABC Inspections—The Standard of Excellence Since 1990

• XYZ Inspections—A Great Inspection Is Just the Beginning

If you have a tagline, you will probably include it in all of your ads.

How Do I Know if Ads Are Working?

Measure everything! We will talk more about measuring results later, but the idea is to track where your business is coming from. This means asking prospects and clients how they heard about you. You are looking to see whether the ad increases your business over time.

Test Different Ads

If you find that an ad is working, you might try changing it and watching for a difference in the response. If it does not perform as well, go back to the original. If it performs better, use it and discard the original. Then start to design the next ad to be tested. Small changes in ads can have a dramatic effect on their effectiveness. Many experts recommend continuous testing of a new ad against the current ad. Keep it simple. Only test one ad against one other. If you always take the better one as your standard, you will refine your ad over time into the most effective possible tool. Keep the old ones though to avoid recycling ideas you tried two years ago.

In our next article, we will look at some specific advertising opportunities.