"Half the money I spend on advertising is wasted," Philadelphia department store magnate John Wanamaker was famously quoted as saying. "The trouble is I don't know which half."

Wanamaker's dilemma remains the bane of advertisers today--especially small-business owners on shoestring budgets. Unlike big-name advertisers like Pepsi, Nike, Apple and Ford, small-businesses can't afford to throw millions of dollars at Super Bowl commercials or glossy magazine ads. Whether your ad budget is $5,000 or $50,000, you've got to make every dollar count.

And that means doing the math to calculate the return on investment on every advertising campaign you run.

What's ROI? Think of it this way: Let's say you rent a targeted list of 100 dentists in your local zip code and send them each a package containing free samples of your revolutionary new dental floss. After adding up the cost of printing, postage, list rental and samples, you may end spending $3 for every package you mail. This means that your campaign will have bring in at least $300 in profit in order to break even and $600 to double your money.

Here's the good news: With the double whammy of the recession and the Internet hurting traditional media channels like newspapers, magazines, TV and radio, there's never been a better time to buy premium advertising at bargain-basement prices--even for a small-business buyer.

The key is finding the advertising channel that best fits your company and your industry and use it to get the biggest bang for your buck. At the end of the day, it's not about how much you spend or how many eyeballs you reach. It's about how many customers you can bring in the door while still making enough money to float your boat. And, while no advertising strategy is foolproof (there's always going to be some initial trial and error before you figure out what works), you'll get better results and waste less money if you do your homework ahead of time.

"E-mail marketing, television, search marketing and yellow pages typically yield a better ROI for unknown or unbranded direct response offers," says Michael Weinstein, CEO of Primary Systems , a South Salem, N.Y., Internet marketing firm."Banner advertising, print and social media are better for companies with existing visibility. For example, Toyota will do better with a banner ad while a one-time 'act now' offer would excel in print or television."

Here's a quick guide to help you decide which advertising strategy is right for you:

Print
Despite the gloomy predictions of the death of the newspaper and magazine industries, print can still be a great way to target a niche market. For example, if you're looking to sell pre-paid phone cards to Indian immigrants in Queens or Mexican-Americans in L.A., local ethnic newspapers can be a low-cost way to reach the entire community in one shot and to deliver discount coupons that let you track response to your offer. Likewise, a targeted local or national magazine can offer an inexpensive way to reach quilters or new parents. Depending on the size of the market and the size of your ad (quarter page, half page or full page), newspapers will typically charge $5 CPM to $25 CPM (cost per thousand impressions). National magazine rates average $6 CPM.

Broadcast
No media outlet reaches more people than television, which is why it's still so popular among advertisers but also why it's so difficult to measure ROI. While TV may be a great way to market a new car to the roughly 100 million people who watch the Super Bowl, it's not a cost-effective way to reach your target market--even if you could afford $2.6 million for a 30-second spot. TV advertising ranges from $10 CPM for a local broadcast to $35 CPM for a commercial on a popular network sitcom. That doesn't include the cost of producing the spot.

"If a general demographic description is all you need, then TV can be great," says Jerry Shereshewsky, a New York City ad agency veteran and CEO of Grandparents.com . "But as soon as you need to get narrower, you're out of luck."

Direct TV is a better bet for small-business owners, especially inventors who have a blockbuster new kitchen appliance or fitness machine that must be seen to be believed. Both broadcast and cable television networks offer 30-, 60- and 120-second direct response commercials at a fraction of the cost of traditional spots. Because DRTV spots usually contain a "call to action," you can flash a toll-free number or Web address that will let you measure your ROI to the penny. If your product is hot, you may even land a deal with a DRTV production company to foot the bill for your infomercial in return for a share of the revenue.

If you're looking to reach a targeted demographic while they're commuting to work in the morning or driving home at night, there's nothing like radio. With an average CPM of just over $4, radio is a low-cost way to reach loyal listeners of popular DJs and talk show hosts. Radio advertising packages offer more than just a pre-recorded spot. They often include on-air introductions to your ad plus interactive contests and giveaways that can help you track and monitor the effectiveness of your campaign.

Directory
Advertising in the Yellow Pages may be old school, but, if you're a plumber, electrician, locksmith or other emergency repair technician, you can't afford not to be there. According to the Yellow Page Publishing Association, 96 percent of U.S. households have at least one copy. When a pipe bursts, a toilet overflows or someone locks himself out of his house at 2 a.m., you want to be the first to get the call--even if nobody remembers that the name of your company is AAA Aardvark Plumbing.

But there's more to advertising in the Yellow Pages these days than listing your phone number in big bold numbers. With consumers and businesses increasingly turning to the Internet to find the service providers they need, it may also pay to list your business in online directories. AT&T's YellowPages.com claims it generates over 140 million monthly searches and that 55 percent of their users have purchased a product or service from a merchant they found there. Merchants can enhance their listings with interactive features like video profiles, premium inventory listings, websites and search engine optimization.

Outdoor
Outdoor advertising - the signs you see on billboards, bus benches, subways, trains, airports, even elevators - is almost impossible to quantify in terms of ROI, but it can work wonders for dentists, lawyers, podiatrists and trade schools looking to reach busy commuters. And, at an average CPM of $2.26, there's no cheaper way to reach a captive audience. So, while a small resort hotel may not have the ad budget of a Marriott or a Hilton, there's no better way to tell weary commuters about your hotel than with a sign that says "Pat's Bed and Breakfast, Exit 16."

Internet
No longer an experimental ad vehicle, Internet advertising will total $24.5 billion this year, up 4.5 percent from 2008, according to research firm eMarketer . Unlike print and broadcast, Internet advertising is easy to measure thanks to tools that track site traffic and click-through. And it's often cheaper than traditional media because many online publishers charge on performance, not traditional CPM-based metrics.

Internet advertising falls into three basic categories:

Banner Advertising
The online sister of print and broadcast, banners can give your ad constant exposure on a popular website or advertising network, letting you associate your brand with a publication that your prospective customers already trust. Banner ads generally work best for e-commerce companies that sell directly from their web pages and boast well-established brands. These are the types of companies that can take advantage of the fact that their next customer may be just one click away. Susan Wilson Solovic, CEO of Small Business Television , says "banner ads work well for branding campaigns and established brands with a simple call to action."

To get the most out of banner advertising, it's best to run your banners on the kind of sites that target your desired demographic--working moms, sports car enthusiasts, business travelers or senior citizens. If you're selling luxury trips or expensive watches, for example, it may be worth paying $7.50 to $15 CPM to advertise on The Huffington Post. If you're looking to tap the affluent baby boomer market, you may not mind spending $25 CPM to $45 CPM to run your ad on AARP's site. But beware: Click-throughs on banner ads are notoriously low, so make sure you're not spending more on banners that you can realistically recoup in sales.

E-mail Marketing
Unlike traditional direct mail with its hefty postage, printing and handling costs, you can blast out an e-mail marketing campaign for little more than the list rental cost alone--and start ringing up sales within minutes. Depending on how narrow the market you're trying to reach (for example, divorced female fly fishers, ages 35 to 45, in Jackson Hole, WY), you can spend a tenth of a penny to more than $1 per e-mail address for a targeted list of permission-based e-mail addresses.

Once you've picked your list, the rest is easy. Just whip up some copy, remember to pop in a link to your website and hit send. Whether you send out your e-mail campaign to loyal customers or hot prospects, you can easily track ROI by inserting a URL in your message that contains a special tracking code or which sends recipients of your mailing to a specific page on your website. A word of caution: "Spam lists" containing e-mail addresses compiled from websites, directories and other sources without their recipients' permission continue to circulate on the Internet. Beware of bargain-basement lists that promise millions of e-mail addresses--or else you may find your mailings blocked and your company booted off your ISP.

Search Engine Marketing (SEM)
On the Internet, every store is only one click away. That's why one of the most cost-effective ways to drive customers to your site is sponsoring search terms on Google, Microsoft, AOL and other popular search engines. Unlike banner advertising and e-mail marketing, which are typically sold on a CPM basis, pay-per-click marketing requires you to pay only when a prospective buyer types in the relevant keywords and clicks on the link to your website.

"Search is now the tool of choice for shoppers, replacing both local newspaper advertising and yellow pages," Shereshewsky says.

Even so, it's important to choose your keywords carefully and closely monitor your budget. Because popular keywords like "toys," "shoes" and "travel" can be expensive, it's often more cost-effective to sponsor more targeted terms like "extra wide women's shoes" or "luxury hiking trips Nepal." Make sure to test the ROI of the keywords you sponsor (along with your ad copy and landing page) before you roll out your campaign in a big way.

In addition to paid advertising opportunities, the Internet also offers the chance to conduct no-cost grassroots marketing campaigns through blogs, social networks and bookmarking sites. But don't expect the kind of ROI from Facebook or Twitter that you get from banners, e-mail or search engine marketing. According to Weinstein, social media marketing "is a great forum to communicate with your customers, but it takes constant care and feeding and isn't suitable for marketers looking for an immediate return."

Whether you choose an online, print, broadcast or directory advertising channel for your next campaign, it pays to do the math before investing your company's hard-earned dollars. A little planning now will ensure that you'll know which half of your advertising budget is working--and which half you'd be better off employing elsewhere.