Any advertising that asks for an immediate response such as a call now 800 number, or an order form, is called Direct Response.
These ads have a specific formula that is followed. A good direct response ad will follow this formula, a bad one will get too artsy and thus loose its sales power.
The whole point is that most businesses do not have the “Madison Avenue” budget to spend on great looking, super funny-artsy ads, that win awards.
With direct response you need to know if the advertisement is bringing you more business or not. Are you getting enough sales or not?
This is typically monitored by what is called “Cost Per Order” or “Cost Per Lead”.
For these ads you would need to take the cost of an ad, determine how many sales you made, deduct the product and ad cost and you would have a “Cost Per Order”.
In the case of generating leads you would want to know how many calls you got from an ad and then devide that into the ad cost and you would come up with a cost per lead.
In all cases, direct response relies on, knowing to the penny, how well a particular ad is doing.
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