System and Business Management

Inquiry Cost as a Misleading Advertising Factor

The Unfairness of Figuring the Value of Advertising on the Basis of the Number of Enquiries it Draws Out, With Concrete Examples to Prove It.

February 1 1910
System and Business Management

Inquiry Cost as a Misleading Advertising Factor

The Unfairness of Figuring the Value of Advertising on the Basis of the Number of Enquiries it Draws Out, With Concrete Examples to Prove It.

February 1 1910

Inquiry Cost as a Misleading Advertising Factor

System and Business Management

The Unfairness of Figuring the Value of Advertising on the Basis of the Number of Enquiries it Draws Out, With Concrete Examples to Prove It.


NOT many years ago the Singer Sewing Machine Company, after years of advertising along general publicity lines which neither asked nor got any responses, started a contest to locate the oldest Singer machine still in use. Nothing more interesting in “results” ever happened to an advertiser. All over this broad land, and from many other lands, came responses. If advertising ever got a sealed and certified approval, it got it then. It must have made a telling impression on the Singer people, who have appeared to regard advertising as a rather unimportant auxiliary to their quite wonderful agency organization. That Singer incident held the germ of an advertising truth which has not grown articulate until recently. The Singer distribution was so nearly perfect that the effect of general publicity was quite submerged below visibil’

ity. Mrs. Thimble, on reading a Singer advertisement, cared not a bit to write to headquarters. Why should she, when an agent was almost around the corner, willing to break his neck getting to her, if she but made a sign ? And yet Singer headquarters, because so few people gave any evidence, by inquiry, that they read the advertising, felt Iskeptical about its value ! In the same way exactly, some manufacturers to-day look upon individual mediums as prohibitive, and perhaps upon all magazine advertising as too costly, when the thing they are judging it by—requests for a booklet, invited by about four lines nonpareil in an ad.—is a small part of the real business of general advertising to any concern with general distribution. Many advertisers, figuring inquiry

costs (upon which they frequently base their entire judgment of mediums) simply divide the net cost of the ad. by the number of keyed inquiries received. They do this whether the booklet or sample offer was allowed six words in small type or six inches of display—without reference to the certainty that the difference between the two is considerable. One magazine may carry an ad, with the six-word invitation, and another magazine may contain a more prominent invitation to reply—but both are judged by the same rule o’ thumb.

Now, if such advertisers were advertising solely to get inquiries— which, of course, they admit they are not—advertising would be as prohibitive, judged on inquiry cost in such a way, as a thirty-foot penitentiary wall. Articles retailing at $2 or less are every day being advertised in mediums considered “fair pullers” at a cost per inquiry of from $5 to $8 and as high at $12 and $15.

Obviously, when you put it this way, general advertisers will concede that they look to their advertising, not to get mail inquiries, but to send people to their dealers. The advertising's success or failure in accomplishing this result is the only true test. The invitation for booklets, samples or mail orders where no dealers carry the goods is an altogether separate and secondary department of the advertisement’s function. It is simply a means of getting in touch with the residue of people reached by advertising—that part merely which the dealer-distribution does not cover ; or of cementing the interest of the customer still stronger. If the general advertiser’s customers were bounded by the people whom he could get to write to him, sudden and mournful would be his funeral !

Advertisers going into the magazines are often greatly scared, either before or after they 'have taken the leap at the cost of inquiries. Landers, Frary & Clark some time ago advertised, covering their story quite com-

pletely in their advertising, which offered a booklet. The small results almost scared them, yet they found that people, after all, were being induced in large numbers to go to dealers to get the goods.

The Pompeian Massage Cream people got results direct by mail quite cheaply for the first year they advertised, and from these results established agents. The second year cost was higher. People were going to agents instead of buying direct ; and each succeeding year, as distribution has grown more complete, inquiry cost has become higher and higher, for perfectly natural and logical reasons. Yet if an advertiser who is inclined to place great stress upon direct results should be told the cost per inquiry he might reply that Pompeian Massage Cream advertising is extravagant general publicity. It is no such thing—it is the very motive power of the business and always has been, and the rising inquiry cost is not an alarm signal, but on the contrary, a mechanical gauge indicating the successful operation of the powerful silent forces of advertising.

Some years ago, in spring, the Knox hat folk (another superb instance of a purely publicity advertiser who has not considered advertising an indispensable creative sales force) put an ad. in the Ladies’ Home Journal offering a catalogue of women’s Knox hats. The requests for catalogues ate up Knox’s supply of 5,000 in a jiffy, and thousands of women are still waiting for a copy. That was a fine proof of the fact that advertising works instantly when people have to write to get something they are convinced they want. A Knox woman’s hat was new and welcome, but to buy they had to send for a catalogue. If the ad. had said “for sale in all stores,” and distribution had been thoroughly arranged beforehand, the effect of the advertising would have been apparent at the stores.

An interesting evidence of the tendency to look at inquiry cost a little

differently is the fact that the General Electric Company has just adopted a new plan of figuring inquiry cost, in addition to the old method. It has two sets of inquiry costs, one “gross” and the other “net.” The “gross” figure is secured in the usual way, while the “net” cost is obtained by figuring the cost of the actual space used to invite inquiries. This gives an additional hint as to the operation of the advertising and the value of the mediums. Says F . R. Davis, assistant advertising manager, concerning this plan, “the justice of this new idea is obvious—it makes the inquiries bear a proper ratio to the total expenditure, instead of making advertising apparently prohibitive by charging the entire ad. against the inquiries. I consider it a step forward in analyzing results.“

Converse D. Marsh, of the Bates Advertising Company, which handles the General Electric account, is the originator of this idea and is thoroughly convinced that inquiry cost needs to be looked at in a different light than ordinarily. “The first purpose of a national advertiser with national distribution is to send people to the store for the goods,” he says, “and the second purpose is to induce retailers and jobbers to stock the goods. The common custom has been, nevertheless, to charge the total cost of the advertising to the inquiries received. As a result, many advertisers are fooled by this method of calcularon, and some publishers have had less advertising than they deserved. Advertisers have been deterred from spending their money on seeing what inquiry cost, as commonly figured, amounts to.

“A little more imagination—which is so much needed in business of every kind—and a little less habit, would cause some new facts to be unearthed about the advertising expenditure of many concerns. How it is possible for advertisers to charge as cost per inquiry the total amount of space used in selling goods to the public, when

that space is very considerably devoted to quite another purpose than getting inquiries? It may be argued that talking for retail sales is also talking for booklet inquiries, but there’s a distinction. You can’t talk for two results at once without confusion. Either you are trying to get people to go to dealers or you are trying to get inquiries, and the amount of attention you give in the ad. to getting inquiries is all that you can justly charge to inquiry cost. Large space may increase inquiry results, but mailorder advertisers get strong results from small ads.

“One of the strongest reasons for abandoning the present widely practised method is that, excepting those advertisers who key the month as well as the publication, a great many advertisers have their returns quite mixed up, and cannot possibly get an accurate estimate of an individual piece of copy. Experience in several accounts has shown that returns from, say, September advertising is within ten per cent, as strong in October as in September. Advertising in the weeklies pulls two and three weeks afterwards. Unless the month is keyed, September results are frequently counted in with October results and inquiry cost. This is obviously misleading, particularly as to the value of a piece of copy.”

Herbert M. Post, advertising manager of the Western Electric Company, says, “I have come to believe that inquiry cost doesn’t amount to a hurrah in estimating the value of mediums. I have given a considerable amount of study to this subject, and I must say I haven’t found any system of measuring values in which I have any confidence whatsoever. I have at least one medium on my list from which an inquiry has cost $450. If I was inclined to hang my faith on inquiry cost I would be scared stiff, but I have good evidence of another kind that the publications whose inquiry cost looks prohibitive are doing good work. Advertisers who are scared at

inquiry cost should ask their sales organization what help advertising is giving them. Our salesmen say Western Electric advertising saves half their time in eliminating introduction and securing standing. Now, a sales organization is a mighty expensive thing, and if advertising can save half its time, the advertising is doing some mighty corking work, and it is useless for me to worry about inquiry cost.” O. C. Harn, advertising manager of the National Lead Company, does not abandon inquiry cost as a help toward judging mediums, “but,” he says, “I am far from making mail replies the sole test of advertising. The subject of inquiries and results is a most live one, and needs constant analysis. It doesn’t matter to me whether inquiries cost $2 or $5 : my appreciation of a magazine does not fluctuate if I am satisfied with other things. I use inquiry cost to some extent in judging mediums, but I do not judge a magazine out of its class. If a magazine’s inquiry cost is somewhere in sight of inquiry cost in magazines of the same class, I do not bother, but if it is much higher than other magazines of the same class, I feel something’s wrong in circulation.

“I made some investigations not long ago of inquiries per dollar of cost, and then also per 1,000 of circulation, and the latter method quickly brought some magazines which had been tail enders in inquiry cost as usually figured, up toward the middle.” Mr. Janvier, who has handled the accounts of Pears’ Soaps, Beecham’s Pills and Sheffield’s Dentifrice, had some interesting things to say. “Eighteen years ago,” he said, “I ran the advertising of Beecham’s Pills with a line at the bottom suggesting sending for literature. At first the direct returns were large. Gradually, as the article became widely distributed, these direct returns fell off, but the business kept on increasing. The idea of judging advertising by the cost per reply is all right for some things and at some times. But to use this test

indiscriminately for measuring the value of your advertising is wrong.”

The Gillette Sales Company, handling the Gillette Safety razor, had an interesting experience in point. They advertised in many periodicals with the offer of a free booklet. The printing order for the booklets had been very large. But very few of these booklets were asked for, yet it was certain that that very advertising had sold many of the razors. The only conclusion they could draw was that people are not supremely anxious to ask for advertised literature—that is, people who are the kind that actually buy. This testimony is significant in the face of the growth of the Gillette sales the past year—fifty per cent.

George H. Hazen, of the Century Magazine and the Woman’s Home Companion, said: “Twenty-five years ago I went from New York to Chicago in thirty-six hours ; I can get there now in eighteen. Judgment in advertising values has also improved. The cost per inquiry is the wrong basis altogether. Let me illustrate. The General Electric Company uses, say, space in the Century, the Woman’s Home Companion, and Farm & Fireside for their Tungsten lamp, the Farm & Fireside might produce three inquiries to the Century’s one or to the Woman’s Home Companion’s two. Would you, therefore, judge the value of space in the Century as being worth one-third that of the Farm & Firesi de? People write for advertised booklets from all sorts of motives; often out of mere curiosity and with no intention of buying whatsoever. Are you going to level the Century and the Farm & Fireside with the cost per inquiry standard ? Absurd. The cost per inquiry is a false gauge of advertising value. This seems perfectly elementary to me.

“The General Electric Company is on the right track. What they want to do is to forget about any cost for inquiries and to select an advertising expert who knows the value of the mediums. If you take the cost per

inquiry as a basis, then you have got to relinquish partly or altogether the matter of quality. Readers of the Century, of Scribner’s, of Harpers’, etc., are presumably cultured. They are people who have money to buy and the inclination to buy. They don’t spend their time asking for booklets. If they are impressed with the advertising of an article they consult their dealer. A thousand of this class might succumb to the advertiser, and buy the article through the dealer, and yet the manufacturer might never know they existed as far as any inquiry was concerned.”

Mr. Rodgers, advertising manager of Harper’s Magazine, was another who took a fall out of the cost per inquiry habit. “Most certainly you cannot rightly judge advertising by the cost of the direct inquiries. Suppose I lived in Dayton, Ohio, and saw

the advertisement of the Tungsten burner. Suppose again I wanted it. Do you think I would write to the General Electric Company? The chances are 75,000,000 to one I would not. I would do the sensible thing and telephone the local light company, or go to a local dealer in electric light fixtures. To write a letter to the General Electric Company would be as antiquated a way of doing business as that of using a quill pen for a typewriter. I believe that the high-grade magazines have very few curiosity hunters, the class that contributes so much to the manufacturer’s mail. This public of culture does business ifi a modern way. They doubtless are accurately sensible to good advertising of a desirable staple, but they demonstrate the motive power of the copy by going to their dealer and not to the post office.”