Advertising campaigns are often expensive investments, particularly for small businesses with little name recognition and limited financial resources. Therefore, it is no surprise that businesses are very interested in measuring the effectiveness of their advertising efforts. Unfortunately, the task of measuring advertising effectiveness is not an easy one. Advertising does not exist in a vacuum, and it can be very difficult to separate out the various factors that might impact business performance and profitability. For instance, a great ad campaign could be negated by poor economic conditions that cause sales to drop overall. On the flip side, sales could increase sharply due to factors entirely unrelated to a new ad campaign that happened to coincide with the increase in sales.
Nevertheless, there are many techniques used to help gauge how effective advertising is. The tips below should be a useful start for any business trying to evaluate the performance of their messaging strategies:
- Define what you mean by effectiveness.
- There are many ways an advertising campaign can be “effective.” Knowing which metric you are using is the first step in evaluating the success of your campaign. Are you most interested in brand awareness? Brand perception? Sales? Repeat business? Profitability? Don’t try to measure everything at once. Focus.
- Include a specific phone number, email address or web address in your ad.
- If the only place a particular email address is communicated to your customers is in a specific advertisement or advertising campaign, you can be fairly certain that whatever potential customers contact you via that email address were prompted to do so by that specific campaign.
- Ask customers to tell you how they heard about your business or what prompted them to purchase your product or service.
- Particularly with online sales, it is relatively easy to simply ask customers directly why they are buying your product or where they heard about your business. Depending on the method used, response rates may not be very high; however, even a relatively small response rate can provide useful statistics than can paint a picture of your entire customer base.
- Use redeemable coupons for certain products or services.
- Just as with using a specific phone number or email address with a particular advertising effort, using a redeemable coupon tied to a specific campaign will give you an idea of how many people that campaign enticed to purchase your product or service.
- Consider overall impact. In addition to measuring the individual impacts of various campaign elements, take a look at your communication efforts in a broad sense.
- Your annual marketing plan should contain objectives that help to direct your communication efforts. How are you raising the bar on overall awareness or preference for your products and services, for instance? What increase have you seen in leads generated? In sales?
- Take advantage of Internet-based analytical tools.
- The Internet offers some easy-to-use, and often free, tools for analyzing traffic to your web site, visits to your blog, forwards of your social media messages, etc. Take advantage of these tools to help quantify your advertising efforts.
Finally, be creative. I recently saw an ad on the back of a bathroom stall door that offered a discount to customers who purchased a specific product and mentioned seeing the ad. It doesn’t have to be rocket science to provide you with useful information. However you measure, make sure you do. You’ll learn from your efforts and can improve your techniques over time.