“I know that half of the money I spend
on advertising is wasted,
but I can never find out which half.”
-- John Wanamaker, the Father of Modern Advertising

     Most advertisers operate under the unconscious “50/50 principle” of spreading advertising dollars equally across various media.  In 1897, Italian economist and sociologist Vilifredo Pareto discovered what has since been called the “80/20 principle,” which states that in most situations, 80% of the output will be generated by 20% of the input.  Translated in advertising terms, 80% of the desired revenues an advertiser earns as a result of advertising will be generated by 20% of the advertising budget.

     That means John Wanamaker’s assertion that half of the money spent on advertising is wasted is actually conservative.  It’s actually more than half.

     Consider the case of the Silhouette Cosmetic Surgery Centers in the following illustration:

    It’s apparent from the above list that 81% of the company’s revenues were generated by only the 3 of the advertising media (postcards, co-op advertising and salesletters) which only comprised 19% of the advertising spending.  It’s also interesting to see that newspaper advertising, which represents 18% of all advertising spending contributes the least (1%) to the company’s revenues.  The company is therefore losing a significant amount of money in not just one, but two ways:  81% of their spending is wasted on ads that don’t yield maximum revenues; and they’re also losing 400% additional revenues they could be generating if they allocated all their advertising budget on direct mail and co-op advertising! 

     The sobering truth is that most advertisers don’t have a clue as to whether their advertising is cost-effective or not.  They often play it safe by “casting a wide net” hoping they’ll have a big catch.  What they don’t realize is that there is nothing safe about casting a big net!

     As illustrated above, chances are, only 20% of your advertising buys are adding significantly to your bottom line – and the rest are not only a poor investment of money, but they also prevent you from re-allocating those precious advertising dollars towards the revenue-generating 20% of your advertising campaigns.

     Thankfully, in this age of technology, we’re no longer as helpless as John Wanamaker was a century ago.  Today, we have a wide array of mechanisms at our disposal that allow us to measure people’s responsiveness to our advertising messages – both on and off the Web -- and enable us to track and test the effectiveness of our advertising.

     Wouldn’t you want to find out which 20% of your advertising buys are working, and the 80% which aren’t?  How would your company’s profitability change when you do more of what’s working and eliminate all the wasted advertising – and consequently get a substantially greater return on your advertising dollar?

     The Pareto Advertising Model is the only book that shows you how to use the 80/20 Principle to maximize the return on your advertising dollar -- whether you want to spend less on your advertising while earning more revenues for your business – OR spending the same amount on your advertising and generating up to 400% more revenues.  No matter how you look at it, it’s a win-win situation.  The Pareto Advertising Model reveals little-known tools and resources that enable you to identify your company’s advertising campaigns that make you money and cause you to lose money, so that you can spend less and earn more.  Any one of the tools or resources you learn from this book could pay for its price thousands of times over.  When would you like to maximize the sales results you get from your advertising dollars?