"Half the money I spend on advertising is wasted; the trouble is I don't know which half." These words, most frequently attributed to American entrepreneur John Wanamaker after the turn of the 20th century, are no less vexing to marketers 100 years later.
New York-based real estate firm Coldwell Banker Hunt Kennedy (CBHK), for instance, regularly uses direct mail, print and online advertising to showcase its properties. And while direct mail and online ads each are trackable in their own ways, print ad effectiveness is difficult to gauge.
Enter Voice over Internet Protocol (VoIP). When CBHK first switched to VoIP phone service from New York-based M5 Networks nearly three years ago, it did so to reduce telecommunications expenses, says Philip Kent Kiracofe, chief technologist at CBHK. Since then, however, M5 has developed Campaign Manager, a suite of services that allows marketers to solve Wanamaker's age-old dilemma.
The gist is this: Through the VoIP service, M5 provides CBHK with a bank of 2,000 different phone numbers. Each property that CBHK advertises is assigned a series of phone numbers from that bank. Each number assigned to a property is then assigned to a different direct mail piece, print or online ad sent in support of that property. This allows CBHK to see which marketing channels drive the most phone volume.
"We can see which medium, whether it's a particular Web site or postcard mailing or print ad, is producing the best result down to a granular level, which is the individual property itself," Kiracofe says. "And by assigning multiple numbers to a single agent, we see not only which ads are most effective, but which agents are most effective as well."
One component of the Campaign Manager suite, proprietary technology developed by CBHK that's called Ad Tracker, automates the assignment of new numbers to a property. Ad Tracker, as its name implies, then tracks every time one of those numbers is called and compiles data used in the reporting software: the ad that generated the call, the agent that answered the call and the call's duration. And rather than using special reporting software, Kiracofe is able to run all reports through a Web portal.
If an agent wants to run a new ad for a particular property, Kiracofe uses the Ad Tracker report to check how effective that agent is on the phone, how much money has been spent on advertising the agent's properties and how many calls those ads have generated. He notes that sometimes the information provided by Ad Tracker shows the ads drive in calls, but agents have a difficult time converting those calls. "If my agents have low conversion rates, it tells me I may need a sales trainer to work with them on customer qualifications, rather than needing to spend more on ads," he says.
Instead of viewing data on individual calls or ads, Kiracofe says he typically looks at ad performance in ranges from two weeks to six months. A report in early October showed that print ads in the previous six months generated only 8 percent of CBHK's total calls, yet represented about 95 percent of Kiracofe's ad spending. "And that's after a lot of reduction of print advertising," he says. "This system allows me to go back to our agents, and even our advertisers, and say this is the reason we're spending less on print."
The Campaign Manager has proven so effective, in early autumn CBHK expanded the scope of its ad tracking. Only about 50 numbers weren't being used at any given point in time, and Kiracofe wanted to track more Web sites than he had been. M5 had 1,000 additional phone numbers added to the bank within 18 hours. Now the system routinely reassigns 100 to 150 phone numbers each day.
The results? Kiracofe shares that he's been able to reduce offline ad spending by more than 60 percent since adopting this ad-tracking approach. During that time, CBHK's business has grown about 300 percent. "We're actually able to say definitively that by reallocating money from print and inefficient mediums into trackable and high ROI media that we're spending less overall and getting a much bigger return on our investment," Kiracofe notes.
Matt Griffin is a freelance writer based in the Philadelphia area and former associate editor of Catalog Success, a sister publication to Target Marketing.