EVALUATING ADVERTISING EFFECTIVENESS You are the advertising manager for a firm that develops software for the Healthcare

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EVALUATING ADVERTISING EFFECTIVENESS You are the advertising manager for a firm that develops software for the Healthcare industry. You've been working with a local advertising firm to develop an advertisement. You've decided to place the ad in trade magazines targeted at purchasing agents in these industries, and also to send it out in a direct mailing targeted to a list of 500 purchasing professionals who work in these industries. To control advertising expenses, you will use exactly the same ad for both advertising campaigns. You are testing which campaign will be most effective based on the marketing communication channel selected. The results of the two campaigns follow:

• Campaign A: You have placed the ad in two trade magazines: Canadian Healthcare Technology and Healthcare IT News. The cost to advertise in the first magazine was $4745 and to advertise in the second magazine was $4350. It was expected that the ad would be read by 700 purchasing agents in the target industries. The ad generated 206 inquiries, 105 of which were later qualified by telemarketing (an average of four calls per hour, and they were paid $16.50 per hour) as worthy of follow-up by a sales representative. The ad was believed responsible for 28 sales, averaging $63 344 with a 21.4% gross margin.

• Campaign B: A copy of the ad was mailed to 1000 purchasing professionals on a mailing list that had been purchased for $1100 from a mailing list supplier. Other costs included printing, $1285; cover letters and envelopes, $115; and postage, $990. The ad resulted in 310 inquiries, 164 of which were later qualified by telemarketing (an average of four calls per hour, and they were paid $16.50 per hour) as worthy of follow-up by a sales representative. The ad was believed responsible for 44 sales, averaging $41 445 with a 22.2% gross margin