Advertising often makes up a significant portion of the operating budget of small and large companies. That is why measuring effectiveness is so important. Measuring is about finding out how often people see a company's advertisem*nts and whether the key messages of those advertisem*nts resonate with the target group. According to the Association of Magazine Media, companies can measure the effectiveness of their advertising by comparing results against their objectives and calculating the return on their investments.
Performance
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Measuring advertising effectiveness involves monitoring advertising campaigns to see if the ads are performing as expected and if the media platforms are reaching the expected audiences. If a small business, e.g. broadcasts radio advertisem*nts for a new product, it must confirm that the advertisem*nts will run within the scheduled time slots and that there is sufficient separation from competitors' advertisem*nts. A simple way to determine the reach of an advertising message is to multiply the circulation or audience by the number of ad insertions, broadcasts or impressions. If the results do not meet expectations, a marketing manager may need to change the advertising media mix or messages, or do both.
Return to target
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Companies can measure return on lens in different ways. If the goal is to change consumer behavior, a company can conduct a telephone or online survey to track brand awareness, ability to remember advertising messages, and purchase intentions. For example, a pharmaceutical company might ask seniors if they have seen advertisem*nts for the company's new high blood pressure drug and whether they remember what the advertisem*nts say. Companies could also measure response to advertising messages by calculating changes in website visits, Internet ad clicks, store traffic and sales. For example, a retailer might measure the change in store traffic following a newspaper advertisem*nt to see if it is meeting objectives. If not, the message, advertising medium, or both may need to be changed.
Return on investment
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Return on investment is the incremental revenue growth for every dollar of ad spend. A high ROI usually means the advertising strategy is working, while a low or negative ROI may require a reevaluation of the marketing strategy. A company may need to change its core message or advertise on multiple media platforms to improve the effectiveness of its advertising. For example, even a small shift in advertising budget from radio to television or from print magazines to the Internet can improve return on investment.
Considerations
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Companies can measure the effectiveness of online advertising in several ways, such as tracking the number of clicks on their Internet advertisem*nts, social media “conversations” that refer to certain advertisem*nts, and website visits. Companies can also measure the effectiveness of their billboard ads through surveys or by measuring changes in store traffic. Billboard ads are effective because people tend to remember the names of stores, restaurants and specific events they see in those ads, according to a 2009 study by Arbitron, a market research firm.
