How to Track Advertising Effectiveness

What’s the most effective means of advertising your business? The one that works, of course.



As a small business owner, you may find advertising intimidating and confusing, but advertising is part of your marketing arsenal. Unfortunately, there's no sure-fire method that works for every business, and every medium is not for every company. The only way to find out if a certain medium of advertising will work for your business is to give it a fair test run. The statistics that advertising sales folks use say that consumers need an average of ten exposures to an ad before they respond. This is how they get you to sign a contract. The fact is that one exposure is unlikely to produce results.



But how do you track whether the medium is working? The answer is simple but takes some work. Every time prospects call or visit your office, you need to ask them how they heard of you. Give everyone who answers the phone a sheet listing the various media in which you advertise and have them ask callers how they came to call your office. Was it a television ad? A billboard? A bus bench or shopping cart? Make a mark next to the medium and do this for a month.



When the month is over, tally up the marks. Do you count only the hits that lead to sales? No—you count the hits that lead to phone calls, because that’s what shows your advertising works—by getting a prospect to call. Then it’s up to you to make the sale.



So if an ad isn’t producing the desired results, should you pull it? If you’ve signed a contract for a certain amount of time, you can’t, of course. But if you haven’t and the ad has produced some leads, just not as many as another medium, there is one thing you can do: request to have your rates reduced. Advertising is more like a Mexican mercado than an American department store—the prices are not written in stone, and often media will reduce their rates in order to keep your business. In any event, it doesn’t hurt to ask.



Before you count up your successes, however, you’ll have to write, produce and place your ads. Should you do it yourself, or hire a professional? Hiring a professional can cost a lot of money, but the benefits often outweigh the price. There are tricks to the trade, and advertising people have been trained to use the most effective words, to come up with catchy and memorable calls to action, to make your advertising look professional.



While many agents write their own advertising to cut costs, they unfortunately don’t have the grasp of grammar, punctuation and spelling they should have. You may think it doesn’t matter, but often when prospective buyers see advertising with misspellings or incorrect punctuation, they run in the other direction. The reasoning is that if an agent can’t spell or won’t take the time and effort to check over their ads, their sloppiness will show in their handling of real estate as well. So it doesn’t hurt to have a professional help.

If you don’t have the budget to pay for professionals, there are alternatives. Go to your local university or community college and visit the journalism or communications department. Students often will work for little or no money to fill out their portfolios. There are also plenty of freelance professionals out there whose prices aren’t padded with agency fees. Ask around, or find out who wrote/produced an ad you admire.



As far as media goes, many small business owners shy away from television advertising. Too expensive, they say. But with the advent of cable TV and specialized stations, the prices have decreased and the opportunity for you to see yourself on TV has increased. Special interest programming and stations helps target key consumers and digital technology allows cable companies to focus advertising on geographic zones served by local businesses. In other words, cable offers the impact of television at a fraction of the cost of broadcast TV advertising—in one case, as little as $8 a placement.



The effectiveness of TV advertising is harder to track, however. The effect of television ads tend to be cumulative over time, and it’s usually used more as a branding strategy than a "call to action"—in other words, it creates name recognition that works for you when a prospect goes to the yellow pages to find a service or product you make. A way to create more urgency in your television advertising is to put in a time-limited offer in order to create leads. You may want to use a mix of both the branding and call-to-action types in your advertising mix. As with other kinds of advertising, it’s wise to vary the frequency of placements throughout the year with increased activity prior to and during the early phases of the peak home buying/listing periods and lower frequency during slow seasons. Your message should vary throughout the year to keep it fresh and attention getting.