Quick Takes: Putting your mouth where the money is!

We have all heard it word of mouth is the best form of advertising, and who would doubt it?  Problem is it is both hard to quantify and to come up with data to prove its effectiveness, or so I thought……

When Drew McManus visited Springfield to work on a board development project he gave us some startling data about the amount we spend on advertising after analyzing our expenditures:

For every dollar we earn in single ticket sales we spend on average just 12 cents on advertising (this year it is even less).  To put it into perspective,  it is not uncommon in our industry to see it go as high as 50 to 60 cents for each dollar earned.   We have spent less in the last 2 years than in the previous 2 to and our audiences have grown significantly.  Our average attendance is now 92%.  To be completely candid, we like many made cuts in our budget including advertising and we were bracing ourselves for the impact, so it was a surprise to us to see that we sold more tickets!

This is not scientific by any means and in some places there are other “environmental” factors, i.e what if there is nothing else to do? However, big screen TV’s are everywhere, as well as movie theaters and in Springfield there is plenty to do.  There is also the tapping into the city buzz element to consider.  Frequently the paper and the big magazine in town 417, will list us as a top pick or best bet but even then with their credibility on the line for making picks there has to be word of mouth for that to happen!  Advertising in our program book has been on a growth pattern also, and now businesses are requesting specific pages, usually next to program info etc…This means that they don’t only advertise but they either attend, or someone is patronizing them and mentioning they saw their ad in our program book!

I can only think that the less you need to spend to get the word out, the more people must be spreading the word for you, and it would be interesting to survey the audience to find out demographically how that works.  The we can start to work on a formula that one day can quantify word of mouth effectiveness so that we put the money that we normally spend on advertising the product, into the product itself!