Measuring the results of your advertising
Measuring the results of your advertising can help you determine which styles, methods and media work best for your business. With solid data, you can plan how to best invest your valuable advertising dollars.
For an advertisement (ad) to be effective, it must translate into enough extra sales to generate a profit. How can you tell if a sale is the result of a specific ad?
Measuring advertising results can be more of an art than a science. The following information will help you plan and carry out your measurements, and compare them against each other.
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What results should I expect from my advertising?
Essentially, measuring results of your advertising means comparing the value of your sales with the cost of advertising. To do this, you need to start early in the process — before you even come up with the advertisement. Ask yourself: "What do I want the advertising to do for my business?"
Immediate-response advertising should convince potential customers to buy a particular product from you within a short time (i.e. today, tomorrow, or next week). An example, of this is an ad that promotes regular-priced items or services but has immediate appeal, or an ad that has a price appeal (clearance sale, holiday sale, or back to school sale).
Image advertising should keep your business and/or brand name in the forefront of customers' minds. This kind of advertising should help you positively influence the attitude of the public toward your business and your offerings. You remind people week after week of the products or services that you regularly offer, and tell them about new or special services or policies.
Image advertising is harder to measure than immediate-response advertising because you cannot always attribute specific sales to it. However, you may notice that an ad or a series of ads that announce a particular brand start to pay off when you begin to get customers who want only that brand and ask no questions about competing brands. In short, the message lingers in the minds of those who have seen or heard the ad. Sooner or later, these people may act upon the message.
Because the effect of image advertising is spread out over an extended period of time, you can measure the results at various intervals. Some image advertising, such as a series of ads about the brands your business offers, can be measured one month after the ads appear, or at the end of a campaign.
What tools and techniques can measure my advertising results?
Whether you are trying to measure immediate-response ads or image advertising, the better you plan, the more accurate your results will be. You must not only determine what you expect to achieve with your advertising, but also find ways to determine if clients have seen or heard your ads.
Testing immediate response ads
The following devices can help you weigh the results of your immediate-response advertisements:
Usually, redeemed coupons represent sales of the product as a result of an ad. Ask yourself whether enough sales were made to pay for the ad. Date your coupons so you can determine the number of sales for the first, second, and third weeks that you placed the ad.
In your radio or television ads, you can have listeners create their own coupons. For example, ask them to redeem their hand-drawn coupon for a free offer sample.
Use coupons for direct mail or email advertising
Code the coupon in such a way that you can easily measure the response. You can even use bar codes containing detailed demographic information.
Hide offers in the ad
A hidden offer can allow you to track how many clients saw or heard an ad because they'll have to mention something in person, on the phone, or in writing. For example, in the middle of an ad, include a statement that will allow the customer to receive a free sample, a great discount, or something similar upon request or by saying a magic word. Results should be checked over a period of one week to between 6 and 12 months since people may not immediately react to this type of ad.
Compare similar ads
Prepare two ads (only slightly different according to the variable you'd like to test) and run them on the same day. Identify the ads — in the message or with a coded coupon — so you can tell them apart. Ask customers to bring in the coupon or to use a special phrase. Run two broadcast ads at different times or on different stations on the same day with different discount phrases. Ask a newspaper to give you a split run — that is, to print ad A in part of its press run and ad B in the rest of the run. Count the responses to each ad to see which scenario is most effective. Comparing similar ads is also effective in other media such as on the Internet.
Promote a particular item
If the ad is about a bargain or limited-time offer, you can consider that sales for the following four weeks came from that ad. You may need to judge how many sales did not come from the ad, but instead from in-store displays, or from the encouragement of sales associates.
Check your traffic
An important function of advertising is to build client traffic that results in customers buying additional unadvertised items. For example, a customer who is attracted by an ad for a blouse may also buy a handbag. Some customers might buy the bag in addition to the blouse, and others m only buy the blouse.
To measure the value of your ads among foot traffic to your retail store, you could survey customers as they check out or leave the store to determine which advertised items they bought, what other items they bought, and what they shopped for but did not buy.
Website traffic works in a similar way. Look at overall website traffic, the volume of customer calls, submissions from the website, and metrics from branded search (both organic and paid). If you use campaign codes in your online ads, you can measure conversions by tracking clickthroughs from targeted emails or social media, and the cost of each for a certain time period or campaign.
Testing attitude (or image-building) advertising
Compare advertising and sales records
Individual ads are building blocks that make up your advertising over a season. It can be a challenge to measure the effects of each ad individually, and the effect of all of your ads together.
To measure the effectiveness of advertising spread out over seasons, you need to keep records. The idea is to compare records of ads and sales for an extended time period. Keep a record of all forms of advertising, by date. Record the cost, keep a copy of each ad, and break the file down into monthly, quarterly, or semi-annual blocks. By recording the sales of the advertised items on the copy of each ad or in a log, you can make comparisons.
One approach is to make weekly comparisons. For example, if you run an ad each week, compare each week's sales with sales from the previous week as well as with the sales of the same week a year earlier. You will, of course, be measuring the momentum of all of your ads as well as the results of a single ad. Over time, you will probably be able to estimate what percentage of the results are due to the individual ads and what percentage are due to the momentum of the entirety of your advertising. You can then make changes to the ads to increase response.
What factors should I take into account when comparing advertising results?
When comparing one time period with another, keep in mind that some variables are beyond your control, and may affect the pulling power of an ad. You can divide ads into at least two classes: high-response ads and low-response ads, for example, then look for differences between the two classes. You should then be able to determine the combination of factors that work best for your business and products.
The time an ad was broadcast or run may affect a particular response level. Use demographic information and sales results to help you determine the best time to run your ads, for your audience.
The tone or look of the message
Consider the message and how well it was expressed. If you used slogans, did they help make the point? For print and Internet, consider the effects of images, type size, white space, colour, and ad location. In broadcast, consider whether or not the voice of the person doing the ad or the music used may have had an effect. Check the effect of the length of broadcast ads. Did you get the best results with 10-second, 30-second, or 60-second ads?
There is no single formula that will ensure high response ads every time. Keep an eye on industry trends and competitors to see what changes are occurring, and what media are being used Social media, for example, has changed the way you can reach consumers and target clients. Continue to analyze your own ads, make small changes occasionally, and note any variations in response.
Listen to what people are saying about your ads. Try to find points that reinforce believability and a feeling that your product fulfills a specific customer wish or need.
Don't confuse attention with motivation to buy. An ad can cause a great deal of discussion, or 'go viral' but may not result in a big increase in sales.
- Market research and statistics
Learn more about market research, how to conduct it, and where to find free information and statistics to support your market research project.
How do I measure the results of my Internet advertising?
Business websites have become an important tool for marketing one's goods and services. Similarly, placing ads on the Internet is becoming an increasingly effective way to promote a product or service since it targets people that are already interested in what you have to offer.
You can measure the effectiveness of your Internet advertising by counting how many people have come to your website via each ad (your ads may vary by type and size, as well as by message, image, and layout). Name each source (channel) in such a way that you can distinguish it from another, by inserting the variable component (colour scheme, image, placement, etc.) or by using campaign codes in the URLs of clickable messages.
For more information on the uses of the Internet for business, and in particular, marketing on the Internet, consult the following documents.
- Online marketing
Online marketing techniques like social networking, emailing and blogging are useful and involve little to no direct costs.
- Website analytics and performance management
Do you want to know how effective your website is? Find out how visitors reach your website, what they do there, and how often they visit.
- Developing your website
Learn how to create a website so you can attract more customers to your business.
Can I compare ads from different media?
When your ads appear simultaneously in different media (such as newspapers, radio, television, the Internet, direct mail or flyers), you should try to evaluate the relative effectiveness versus the cost of each. You can check one print medium against the other by using companion ads — the same or almost identical ads.
You can make the job of analyzing and comparing results easier by varying the message. This way, your ad copy becomes the means of identifying your ad response.
You can identify results of your campaign in various media by changing the call to action for each. Suppose, for example, that you advertise an item at 20% off. Your broadcast ads (radio, television, etc.) might say something like: "Come in and tell us you want this product at twenty percent off." On the other hand, your printed ads might require the customer to bring in the clipping itself.
Some of the ways to vary the copy are: combining the brand name with a word or words indicating the product type; tone of voice; speed of delivery; variations of picture, size and colour. Check your printed ads against each other as well as against your broadcast ads.
Be careful that the copy variation is not so great that a different impression is received from each medium.
Are there short-term and long-term effects of advertising?
Even one ad, commercial, or highway poster can result in sales and brand awareness for your business. A series of related ads can lead to sales over a longer period of time than the duration of a single campaign. Your spending on advertising therefore, should be scheduled over varying lengths of time.
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