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By Craig Proctor

RISMEDIA, June 18, 2008-If the ads you run don’t earn you more than you spend, you shouldn’t run these ads. Sounds logical doesn’t it? But in the day-to-day operation of their businesses, the truth is that many agents have no idea how much their ads really cost. They know how much they invested to run their ads in the newspaper or on a postcard etc (in other words, they know the media cost), but they have no idea how much the ad returned to them or whether it paid back the money they invested.

proctor_craig.jpgThe mistake many agents make is looking at their advertising dollars as a fixed expense of their business, like rent or salaries, and they hope with a blind faith that this investment is furthering their business.

When I put it this way, I’m sure you can see the error of this way of operating but, as so often in life, knowing and doing are two different things.

Blind faith (or blind resignation) is NOT an acceptable way of running your business. Instead, you should think of each ad as if it were one of your salespeople or employees. If this person never earned you a dollar — or if you had no way of knowing whether they were making you any money — what would you do? Well, you’d fire them and find someone to replace them.

It’s the same with your advertising. Your ad is just like one of your salespeople. However, your ad can be a lot more, because it’s like a thousand salespeople. Ten thousand sales people. This salesperson in print is your “Exponential Salesperson.” One little ad in your newspaper (if well conceived and executed) is like having thousands of salespeople going out into your prospects’ homes telling your story. Clearly you want to make sure that these thousands of salespeople are telling your prospects the most compelling story they can — one that will motivate prospects more than any other.

Without testing, you have no way of knowing what this story should be. The only way you can test and measure your marketing efforts is if every piece you run has a direct response component to it (i.e. a trackable 800# or website address.)

It is very important that you have a way to statistically measure the response to every one of your ads. Your 800# or website provider should be able to give you automatic and accurate test results of your ads in real time. You should be monitoring these tracking reports every day, which will allow you to know immediately what worked best and what didn’t work as well. This gives you the ability to adjust your future marketing programs. It is, in effect, your prospects who are directly giving you this feedback.

You should test not just which ads to run, but also where, which days, how often, etc. You have to look at a number of factors together in order to get a full and accurate picture: media cost, number of responses and quality of responses (i.e. how many of the prospects from this ad actually turn into clients.)

For example, take a look at the following scenarios:

   Ad #1 Ad #2  Ad #3 
Media Cost (A)  $100  $200  $2,000 
# Calls (B)  20  50  50 
# Msgs (C)  2
# Listings (D)* 
ROI (Dx$2500/A)  -0  12.5  2.5
Ad Revenue (E)  $0  $2,500  $5,000 
Net Cost (A-E)  $100  $0  $0 
Net Profit (E-A)  -$100  $2,300  $3,000 
ROI=Return on Investment       
*Assume each listing nets you $2,500       

Here are a few observations:

1. Your cheapest ad turned out to be your most expensive ad. Because Ads 2 and 3 made you money, they didn’t actually cost you anything.
2. At first glance, you might conclude that you should run more of Ad#3 because it made you the most money. However, if Ad#2 consistently returned you the same result, spending $2,000 on 10 Ad#2’s would actually be a better use of your advertising dollars since you’d make 12.5X your money ($200 x 12.5 = $25,000) rather than 2.5X your money ($2,000 x 2.5 = $5,000) for Ad#3.

You don’t need to become a financial wizard to do this kind of analysis. It’s really very straightforward. The most important thing is that you’re aware of the implications of what you’re doing so you can make informed and financially profitable decisions about the ads you run.

“Only in the past few years, since implementing Craig’s Quantum Leap System in my business, have I tracked and tested every ad I have run. I used to run ads that I thought would be good at getting the phone to ring, without realizing that my vote was of little importance. The only vote that counts is that of our prospects, which is one of the reasons we now track the performance of each and every ad we run. We must give our prospects what THEY want, not what we want to sell them. We must give our prospects options, test the response and amplify what is working best, which clearly is our prospect’s choice. Now with accurate tracking and testing, I generate between 250 and 300 leads per month at a cost per lead of between $8 and $50. In my previous real estate career, I hoped an ad would work, now I know! My prospects tell me everyday which is the best ad to run.” – Gil Szabo, BC

To find out more about how to track and test your ads, you can visit where you can learn about my 3-day SuperConference where I train agents on how to craft, run and test effective and inexpensive direct response advertising.

Billion Dollar AgentTM Craig Proctor has been in the top 10 for RE/MAX Worldwide for 15 years and is the only real estate trainer who actually does what he teaches. Craig consistently sells over 500 homes per year to earn almost $4 million in commission. Over 25,000 agents nationwide use Craig’s system to make more money in less time. To receive free training from Craig with no obligation, visit: This Free Training includes free weekly teleconference training calls with Craig and some of his most successful agents where they discuss the cutting edge strategies they’re using right now, in this market, and explain how they work. You’ll also receive a free weekly email newsletter that reveals the tested and proven marketing strategies that continue to make Craig one of North America’s top agents. By taking advantage of this free training, you’ll also get advanced notice of Craig’s free half day seminars that will provide you with the tools you’ll need to start implementing these ideas immediately. These seminars are held year round in cities across the country. To receive free training from Craig with no obligation, visit: