Once the small business owner has successfully designed and placed an ad (or had that ad successfully designed and placed by an agency), he or she will be eagerly awaiting the increased sales that advertising promises. While advertising can be an effective means of increasing profitability, measurable increases in sales may not be immediately forthcoming. But if the advertising was well-planned, well-placed, and well-executed, it will likely produce positive results eventually.
It is widely accepted among advertising experts that one major benefit of advertising any business is the cumulative effect of the message on consumers. This effect occurs as consumers are repeatedly exposed to advertising that may not have an immediate impact, but becomes familiar and remains in the memory. This message will be recalled when the need arises for the advertised product or service. The consumer, because of the cumulative effects of advertising, will already be familiar with the business's name, as well as the image that it has cultivated through its advertising campaigns. For example, a consumer has heard a carpet cleaning company's ads for months, but until the need arises to have his or her carpets cleaned, there is no reason to contact the company. When that need does arise, however, he or she will already know the name of the company and feel familiar enough with it to engage its services.
One trap that advertisers sometimes fall into is that of restlessness or boredom with a long-running campaign. The owners of a small business may feel a need to change a long-running advertisement simply because of a desire to try a new, more exciting avenue. There are certainly valid reasons for doing so (stagnant sales, changing competitive dynamics, etc.) at times, but advertising experts discourage businesses from yanking advertisements that continue to be effective just for the sake of change. "If it ain't broke, don't fix it," is the guiding principle behind this caution. They note that consumers learn to associate businesses with certain advertisements, design elements, or themes, but that these associations sometimes take time to sink in. Similarly, industry observers counsel small business owners to maintain a level of consistency with the advertising media they utilize (provided those media are effective, of course).
By choosing an appropriate style and theme, and carefully placing ads in effective media, the small business owner begins to create a lasting foundation for his or her company. Maintaining an advertising campaign in itself advertises the stability, dependability, and tone of a business. If customers are finding the ads useful, then the advertising is working; changing the ads could diminish their effectiveness.
STRATEGIES FOR TRACKING ADVERTISING'S EFFECTIVENESS
Before the advertiser decides to stick with one advertising plan for the next several years, however, he or she wants to be sure that the advertising is having some effect. Because of the cumulative effect of advertising, this can sometimes be difficult to ascertain. The following are suggestions for the often vague science of tracking the effectiveness of advertising:
Monitoring Sales Figures
This strategy involves tracking sales from a period before the current advertising was used, and then comparing those figures to sales made during the time the advertising is active. One pitfall of this strategy is not choosing a representative time period. One month's worth of sales figures may not be enough to fully gauge the effectiveness of an ad. Ideally, the business owner could compare figures from long periods of sales to exclude changes due to factors other than advertising, such as seasonal fluctuations and holiday sales.
Running a Coupon
One satisfyingly concrete way of tracking how many customers were exposed to advertising is to use coupons. These coupons, which will typically provide a discount of some kind or some other incentive to customers to use them, can be easily tabulated, providing businesses with tangible evidence of the advertising campaign's level of effectiveness. Such measurements, however, are limited to print campaigns. Another coupon-type offer, effective across media types, is to encourage customers to mention their exposure to an ad in return for a bonus. For example, a radio ad might include the sentence, "Mention this ad for an additional 5 percent off your purchase!"
Perhaps the most accurate and easiest method of tracking the effectiveness of a media campaign is simply asking customers how they were directed to you. You can ask if a customer saw a particular ad, or more generally ask how they came to know about the shop or service. Consumers are generally pleased to be asked for their input, and they can give you firsthand accounts of how advertising is affecting your business.
Internet Ad Tracking
One of the unique aspects to using the Internet for advertising is the fact that it is easier to track the number of people who actually see and register the ad. Because of the interactive nature of the Internet and the methods used to advertise online, a company can actually track the number of people who both see their ad and take some resulting action, like clicking on a hypertext link. However, knowing how many people have seen an ad does not automatically translate to knowing what percentage of new sales are the result of this exposure. Assessing the value of this Internet exposure must be done in the same ways that advertising generally is assessed, through careful tracking and monitoring.
East, Robert. The Effect of Advertising and Display. Springer, July 2003.
Nucifora, Alf. "Getting the Most from Your Media Purchase." LI Business News. 23 October 1998.
United States Small Business Administration. Advertising Your Business. n.d.
Hillstrom, Northern Lights
updated by Magee, ECDI