In fact this is such a challenge that David Ogilvie the advertising guru of the 20th century is often quoted as saying “I know half of the ads we place work. I just don’t know which half.”

The reality is very little doesn’t work. Most advertising has value. Everything you do  from the sign you hang up on your door to the 52 week radio schedule has impact of some sort. The trick becomes measuring the return of each ad or campaign and then determining if your return on your investment (ROI) is enough to encourage you to do it again.

The first step in any measurement conversation has to be realistic expectations and measuring the FULL IMPACT of an advertising campaign by considering both its immediate impact plus the residual effect of that initial run of ads whether they are on the radio, in the newspapers or on a hot air balloon.

Here are some ways (Short and Long Term) to measure your campaign.

SHORT TERM
Sales Of Advertised Item
    If you are promoting a single item or price offer, simply monitor how many of a particular item you sold that you were advertising. But DON”T RELY exclusively on this factor. It’s easy to do. Many retailers use this measurement soley and then drop the entire campaign. This is only one indication of campaign’s effectiveness. And it’s not a very good one at that.
There are a variety of factors that will inhibit results from a single sale item approach including a product being so unpopular you couldn’t sell it at any price to customers upgrading etc.

Sales Of Regular Priced Items
    A tad better approach might be to consider all sales. Did your week overall improve? Did floor traffic increase? You can’t expect sales to double, but is there a measurable increase in cash register receipts a few days into your ad campaign? Has even a slight up tick occurred?  Remember not even the stock market can double your returns, but did a $500 ad campaign return $600 in new business creating a 20% return on your investment?

New Faces
    Did your customer email database grow faster than usual? Did there seem to be a bit more phone calls asking for directions than happen in typical week? Was there simply one new person each day in your store you didn’t recognize?  These are all potential new long-term customers for life who will be repaying your advertising investment for years.

LONG TERM CUSTOMER COMMUNICATION
    The final measurement is impossible to measure (thanks a lot! And you thought you were going to get great insight here!) Well there are some serious things to consider about any advertising campaign when measuring it’s effectiveness.
    Customers (present and future) go through phases before they actually buy. These include
1. Unawareness of your Product
2. Top Of Mind Awareness
3. Complete Understanding
4. Trust Bond
5. Buying Motivator

Each customer must go through these stages at his or her own pace and each advertising campaign, each contact by email or flyer, each visit to your store moves the prospective customer further along on this process.

Therefore ask yourself if your current campaign is doing that as well as the above short term measurements and you will be on your way to better evaluating your advertising and marketing.

To read more on Customer phases read, David Can Still Beat Goliath by Norton Warner .