BY TODD DAVIS

Retailing pioneer John Wanamaker - among the first to embrace retail advertising in the mid-1800s - is credited with the phrase: "Half the money I spend on advertising is wasted; the trouble is, I don't know which half."

It's an axiom the advertising industry hasn't been able to shake, since advertising is emotional and often unpredictable beyond never anticipating results greater than a single percentage point.

But scientist Ranjit Roy and automotive marketing veteran Michelle Morrissett want to change that perception. They call it MetaMarketing.

Using statistical analysis known as the "Taguchi method" to test the performance of advertising before it runs, the two say MetaMarketing has the potential to dramatically improve advertising efficiency similar to the gains achieved by applying the practice to engineering.

"You never know how effective your advertising is," said Morrissett, president of Troy-based Fouresquare LLC, a marketing and business development firm launched in 2003.

"This helps narrow the bull's-eye instead of scattering advertising all around."

A direct-mail trial run this summer for Hank Graff Chevrolet in Davison resulted in a 60 percent gain in responses over traditional advertising, the Fouresquare principals said.

Morrissett said future applications could include Internet marketing programs, advertising agencies and other retail advertisers.

New applications, new results

Roy, through his Bloomfield Hills-based company, Nutek Inc., has been teaching the theories of Japanese scientist Genichi Taguchi to engineers and managers of Fortune 500 companies since 1987.

Taguchi's "design of experiment" methodology provides the framework for performing multiple test parameters simultaneously. Traditional testing methods compare two sources of influence at a time - repeated for validation - before comparison with another set of data.

It has become an accepted form of quality control and validation for ISO/QS-9000 and Six Sigma practitioners around the globe, Roy says.

"It's applicable in many areas - from cars to Campbell's soup," he said. "Many who followed it were so preoccupied with manufacturing, it wasn't applied to other avenues."

Having worked in marketing for Ford Motor Co. for 16 years, Morrissett also realized the potential Taguchi's could have on the industry.

"(Design of experiment) is a tried and true discipline in many environments," she said. "Now we're applying it to the marketing and advertising arena."

For the pilot program at Graff Chevrolet, Morrissett and Roy analyzed a variety of marketing and advertising criteria that they gathered through a series of focus groups with sales representatives and customer surveys.

Roy crunched the data in a program based on Taguchi's method, narrowing 128 potential advertising options to eight.

Morrissett created eight ads based on the results of the program, mailing 1,000 direct-mail pieces in August based on each option.

The most-effective ad was a letter with two colors, a picture of Hank Graff in the upper right-hand corner and not much text. The returns demonstrate that an easy-to-understand offer and brand recognition work, Morrissett said.

According to dealership general manager Chris Graff, the results, delivered in October, were "astronomical."

"Statistically, they proved one of the eight ads was far more effective than the others," he said.

Morrissett compared 5,481 target customers to customers - identified through Graff's customer database - who purchased new cars during the test period. She said 2,519 were eliminated from the count due to duplication and technical difficulties obtaining data from the dealership's computer system.

Of the target customers, 59 bought new cars from Graff Chevrolet during the campaign. That's less than a 1 percent response rate overall, but an improvement of 61.2 percent over Graff's own previous best campaign.

Compared to the dealership's "average performing campaign," the ads resulted in a 135 percent improvement, Graff said.

Still, Graff said he remains a skeptic, holding off on final judgment.

"We're going to run that (same) sample again to validate the results," he said.

Once a "best method ad" is identified, a client can reuse the advertising and marketing data as long as they want, Morrissett said.

"The bull's-eye always moves," she said.

"It's reasonable to re-test after 12-18 months as market conditions change."

The costs can vary, depending on the complexity of the preparation and research, according to Morrissett, but are expected to be 5 percent-10 percent of the prospective campaign budget.

Todd Davis is a freelance writer.