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04/30/2013

7-Year Advertising Study For Small Business

A team from the Wharton School of Business at the University of Pennsylvania, set out to establish the definitive answer to the question: �If I spend this much money on advertising, what can I expect to see as a result?�

Pepsi, Frito-Lay, Colgate-Palmolive and a host of other big companies collectively invested more than a million dollars so that Wharton might track the return-on-investment experienced by several dozen small businesses as a result of advertising.

These businesses were scientifically monitored and measured for seven full years. The final report filled more than 2,500 pages, and the following conclusions were reached:

1) There is no direct correlation between dollars invested and results gained.

In other words, how much you spend and what you can expect to see in return are not directly linked by any kind of mathematical equation.

2) Results are inextricably linked to the message.

Two advertisers invest the same amount of money, reaching the same target audience. The difference between succeeding brilliantly and failing miserably was in the message of their ads. Ads that speak to the heart of the customer and touch a nerve are the ones that turn little companies into big companies.

But few people know how to write such an ad. And there is no evidence to suggest that the goal of merely getting one�s name out there will help you in the slightest. The Wharton study indicates everything hinges on the message you attach to your name. Is it boring? Is it believable? Is it relevant to the perceived need of the target audience?

3) Results increase with repetition.

When you�ve identified a message that generates a positive response and you deliver it consistently, business growth in year two will be approximately twice the growth of year one. Growth in year three will be about triple the growth of year one...with growth measured in dollars, not percentages.

Following year three, anything can happen. Your business can explode exponentially, or it can flatten out as though hitting a glass ceiling. The difference at this point is in the clients, not in the ads.



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