Advertising Effectiveness

How to Determine Advertising Effectiveness

So, was the ad effective?  Did it work?  How will you know? 

Advertising effectiveness starts with determining how you will know if an ad is effective after it's run

Know this:  You start with determining what your success measures are.  It's not the last thing you do after the ads run and someone asks, "So, did what we spend on that advertising pay off?"  Most people don’t start with this, and then they can’t answer the questions after the ad runs, Did this ad work?  How well?  Did it deliver a good return on investment?  Establish your success metrics before you create ads or spend any money. 

 

Ask yourself:  What is the reason for doing advertising?  Why are we spending money to do advertising?  What are we trying to accomplish?

The answers to these questions are called your advertising objective(s).  There are four types of advertising:

Brand advertising is deemed to be effective when it's shown in a statistically projectable way to:

Direct response advertising is considered effective when it works to:

TIP:  customer acquisition should involve more than just getting new customers/accounts.  It should consider how profitable they will be initially and over time; the ROI to acquire the customer; and the customer lifetime value. 

Multiple measures are better for direct response ads:

• Generate leads
• Get people to a website (to learn more and/or register/buy)
• Attract people to a physical location (store, restaurant, shop)
• Generate direct sales (by phone, online orders, or at stores)
   

Another type of advertising effectiveness:  when the ad drives preference to purchase. This advertising is developed and funded by a product or service manufacturer that doesn't sell direct to consumers or other businesses, so they are investing in advertising to drive sales into their retail partner stores or to make it easier for their sales reps to get appointments with prospective customers. Example: Ads from Nike about a new type of shoes that list retailers where you can buy them.

TIP:  Most types of advertising have only a few seconds or moments to convey a message so don't overload the ad with too many messages or expectations.  Your ads will be more effective if they have a single-minded purpose.  Remember, you can develop different ads for different purposes.  The majority (80%) of your advertising budget goes to buying the space (media) where the ad will run, not to developing and producing the ad. 

Advertising effectiveness should be based on specific and time-based advertising objectives that can be measured

What will you consider a successful result?  There is a basic formula you can use to define your advertising objectives:

What + Who + How much + When

What do you want to do? Who do you want to do it? (You’ll learn more about this piece in Step #3.) How much of an impact will it have? By when do you want it done?

Some examples:

Objective:  Increase awareness among moms with school-age kids from 23% to 30% during the Christmas holiday season.
Measure(s): A research survey among the target audience before the ads run and immediately after to measure change in awareness. 

Objective:  Generate 2,500 qualified leads for XYZ product by September 30.
Measure(s):  Set up a system to track leads that come in through the advertising and at the end of the ad campaign, count how many leads were generated based on the advertising investment.

The difference between marketing objectives, strategies and tactics is often confusing … even to marketing professionals! This article may be helpful:  Marketing tactics, strategies and objectives

TIP:  You can also pre-test ads as a “success metric” and only run ads that meet particular criteria you establish. This is particularly helpful for hybrid ads that are supposed to drive preference for purchase but, since people will buy from retailers, you won’t be able to measure if the ad was responsible for the sale. 

Ads can be pre-tested for all kinds of things:

TIP:  You may want to learn about how to conduct ad testing at this early stage.  This article will help explain more:  How to do ad testing

From our experience: Most companies and business owners want metrics related to these (in priority order):

 

• Increased sales and order volume as a result of the advertising
• Share of market (Hospitals share this data but it’s hard to get for other local and small businesses.  This measure is primarily used by major advertisers.)
• Brand awareness
• New leads
• New customer/members conversion rate
• Calls and website visits
• Feedback from the sales force

 

Next page- How to set up your ad effectiveness measurement(s)