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advertising must be costed and linked to measurable response

Because advertising is such a complex science the only real way to be sure that something will work before you try it is to refer to previous indicators, and if you’ve no previous statistics or reliable data then run ‘pilot’ or trial first. Start measuring the effectiveness of your advertising from the very beginning. Keep detailed records of what you did, when, to whom, for how much, and what resulted.

The results of certain types of advertising can be quite difficult to measure, particularly where no direct response is sought, (where follow-up sample surveys might be the only way to gauge effects), but measure everything in whatever way you can. Starting a business and a completely new advertising campaign inevitably involves a bit of calculated guesswork, however, if you start measuring and recording results from the beginning then you’ll make your task much easier next time around.

Modern online advertising methods usually enable very accurate measurement of advertising effectiveness.

Key statistics and ratios to be measured include:

cost per thousand (potential customers reached, with your advert)
cost per response
cost per response
cost per enquiry or ‘lead’ (basically a prospective customer expressing interest)
percentage responses (enquiries from a given number of contacts/customers reached)
conversion numbers and percentages and costs (conversion of a ‘clickthru’ to an enquiry/lead, or conversion of an enquiry/lead into a sale)

A very basic and often overlooked method of measuring and recording advertising effectiveness and results is to ensure that every enquiry is greeted at some stage with the question, “How did you hear about us?” or “How did you find us?” Even very large ‘professional’ organisations commonly fail to instill this basic principle within their customer service processes, and yet it is very important.

You should measure advertising from the standpoint of every particular advertising activity, method, or campaign, and also from the simple standpoint of every sale you make, which of course come from a variety of advertising sources.
You should measure advertising from the standpoint of every particular advertising activity, method, or campaign, and also from the simple standpoint of every sale you make, which of course come from a variety of advertising sources.
These days there is every opportunity to properly record and measure enquiries and advertising responses: Computer-based CRM (Customer Relationship Management) systems nowadays offer relatively easy and cost-effective ways of managing customer and enquiries information. Make sure you use one. Then you won’t need to guess as to what forms of advertising work best for you.
These days there is every opportunity to properly record and measure enquiries and advertising responses: Computer-based CRM (Customer Relationship Management) systems nowadays offer relatively easy and cost-effective ways of managing customer and enquiries information. Make sure you use one. Then you won’t need to guess as to what forms of advertising work best for you.

Remember also that advertising forms a part of your business plan, which is aimed at being profitable. This is especially important when your advertising is aiming to produce direct responses and sales (rather than building awareness and reputation, etc).

If your advertising seeks to generate customers and sales, but does not produce a gross profit in excess of its cost, then you must stop it or change it, otherwise you are obviously wasting money.

Back to marketing index.

You should measure advertising from the standpoint of every particular advertising activity, method, or campaign, and also from the simple standpoint of every sale you make, which of course come from a variety of advertising sources.

cost per enquiry or ‘lead’ (basically a prospective customer expressing interest)
percentage responses (enquiries from a given number of contacts/customers reached)
percentage responses (enquiries from a given number of contacts/customers reached)
conversion numbers and percentages and costs (conversion of a ‘clickthru’ to an enquiry/lead, or conversion of an enquiry/lead into a sale)

A very basic and often overlooked method of measuring and recording advertising effectiveness and results is to ensure that every enquiry is greeted at some stage with the question, “How did you hear about us?” or “How did you find us?” Even very large ‘professional’ organisations commonly fail to instill this basic principle within their customer service processes, and yet it is very important.

Remember also that advertising forms a part of your business plan, which is aimed at being profitable. This is especially important when your advertising is aiming to produce direct responses and sales (rather than building awareness and reputation, etc).

If your advertising seeks to generate customers and sales, but does not produce a gross profit in excess of its cost, then you must stop it or change it, otherwise you are obviously wasting money.

Back to marketing index.

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